Israeli security forces were on high alert Wednesday, the start of the eight-day Jewish Passover holiday, for a new wave of attacks by Palestinian militants who have carried out scores of shootings and bombings in 18 months of fighting.

In oft-hit Jerusalem, downtown streets were nearly deserted, and large numbers of police patrolled malls and bus stations.

In new violence, Israeli troops shot dead two armed Palestinians who infiltrated from the Gaza Strip early Wednesday. The Israeli military also said soldiers found an explosives belt in a search of a Palestinian ambulance in the West Bank. The Palestinian Red Crescent denied explosives were being smuggled by the ambulance.

Also Wednesday, Palestinian security forces said they would investigate the killing of two international observers — a Swiss woman and a Turkish man — in an ambush by a man in Palestinian police uniform late Tuesday near the town of Hebron.

A surviving passenger in the observer car, Turkish Capt. Huseyin Ozaslan, told Israel Radio that a man dressed in Palestinian police uniform stood in the middle of the road and shot at least 30 bullets at the car marked with TIPH signs.

In the Gaza Strip, about 1,000 Palestinians marched in support of Yasser Arafat, who decided not to attend Wednesday's Arab summit in Beirut, Lebanon, because of Israeli conditions on his departure and what the Palestinian Cabinet said was a threat not to let him return.

In an interview published Wednesday, Prime Minister Ariel Sharon said that he tried, but failed, to persuade the United States to impose sanctions on Arafat if the Palestinian leader breaks a promise to fight terror.

Sharon accused Washington of mixing its policy toward Iraq with the needs of Israel.

"The Americans don't see eye-to-eye with us on the situation," Sharon said. "There is a conflict of interests between the need of the Americans to form a coalition for their possible action against Iraq and our need to fight Palestinian terrorism."

Sharon also said he regretted having promised the Bush administration that he would not expel Arafat.

Meanwhile, a U.S. effort to achieve a truce to end 18 months of conflict hit a snag.

Israel reluctantly accepted bridging proposals presented by U.S. envoy Anthony Zinni, Israeli Defense Minister Binyamin Ben-Eliezer said, but Palestinians raised some objections in a meeting with the envoy.

No further negotiations were scheduled. Zinni has been working on a truce for the past two weeks, but the talks have been punctuated with violence.

Bush, however, said Wednesday the talks led by Zinni "are making very good progress. That's where the focus of this administration is."