Israeli soldiers destroyed two houses belonging to homicide bombers in the West Bank, the military said Friday, a day after soldiers killed a child and two attackers in two shootings in the Gaza Strip.

Meanwhile, a meeting set for Thursday to discuss a plan to ease tensions was put off, probably until Saturday night.

The military said soldiers destroyed the house of Iyad Sawalha, an Islamic Jihad member who was responsible for a homicide attack in which a bomber blew himself up next to an Israeli bus, killing 17 passengers on May 6. Troops also knocked down the family home of Murad Abu Asal, who blew himself up on Jan. 30, wounding two Israeli soldiers.

Palestinians said Sawalha, an activist in the Al Aqsa Martyrs Brigades, linked to Palestinian leader Yasser Arafat's Fatah movement, has not been apprehended by Israeli forces. In recent weeks, Israel has begun demolishing the homes of attackers to dissuade others from becoming suicide bombers.

In violence Thursday, Israeli soldiers shot and killed two armed Palestinians who were crawling toward the fence around Gaza, apparently planning to attack soldiers or infiltrate Israel, the military said. The two were carrying a large bomb, the military said.

A 5-year-old child was killed Thursday in a residential area of Khan Younis in the central Gaza Strip, near an Israeli settlement, residents said. His grandfather and another Palestinian man were critically wounded, they said, charging that the shooting was unprovoked.

In a statement about the incident, the Israeli military said three Palestinians opened fire at soldiers and fled in a car. The soldiers fired back, wounding one of the men in the car. The military said it knew nothing of a wounded child.

Israel was absorbing harsh criticism after soldiers forced a Palestinian teenager to approach the house of a Palestinian militant to tell him to surrender. The youth, Nidal Daraghmeh, 19, was shot and killed, though it was unclear who opened fire.

The Israeli human rights group B'Tselem charged the military's use on Wednesday of Daraghmeh as a "human shield" was illegal. "It is not the duty of the Palestinian population to protect (Israeli) soldiers, but the military's," the group said in a statement.

After the gunfire, Israeli forces bulldozed a house on top of Hamas militant Nasser Jerar, 44, killing him. Jerar, who used a wheelchair, had lost both legs and an arm in May 2001 while trying to plant a bomb, the Israeli military said, adding that he continued to recruit suicide bombers for Hamas and was planning a bombing that would bring down an Israeli high-rise building.

Several hundred angry Palestinians marched in Jerar's funeral procession on Thursday in the town of Tubas.

As the violence continued, a high-level Israeli-Palestinian meeting originally expected Thursday to discuss a partial Israeli withdrawal in Gaza was put off.

Israeli Defense Minister Binyamin Ben-Eliezer was to see Palestinian Interior Minister Abdel Razak Yehiyeh to discuss an Israeli proposal called "Gaza First." However, the Israeli Defense Ministry said the meeting had been postponed. No reason was given. Palestinian officials said it would probably take place Saturday night.

Under the plan, Israel would pull its forces back from the outskirts of Palestinian population centers in Gaza and turn security over to Palestinian forces as a test case. If successful, Israel would implement the same procedure in the West Bank.

The situation in the West Bank is radically different from that of Gaza. Israeli forces moved into seven of the eight main Palestinian cities and towns after back-to-back suicide bomb attacks in Jerusalem in mid-June, imposing curfews. Palestinian officials say the Israelis have destroyed their security services in the West Bank, and they cannot stop militants planning attacks against Israelis.

The Israelis say Gaza is a good testing ground of Palestinian intentions because their security forces there are intact. However, in repeated air strikes, Israel has knocked down dozens of Palestinian police stations and headquarters in Gaza, as well as Palestinian leader Yasser Arafat's seaside headquarters. Arafat has not been in Gaza this year, confined most of the time to his West Bank headquarters in the town of Ramallah.

Also Thursday, Palestinian Finance Minister Salam Fayad announced creation of a holding company that will handle all Palestinian Authority funds, a key reform demanded by the United States and others.

U.S. and European governments have complained for years that the Palestinian financial structure is not transparent and does not allow donors to follow their money to projects for the benefit of the people.

Moving control of public and private funding to the new holding company, Fayad said, "I think it can ensure accountability and transparency and it will encourage the investors, especially those in the private sector."