Israeli troops, backed by about 60 armored vehicles, raided a town in the Gaza Strip early Wednesday, searching mosques and homes for suspected Islamic militants and exchanging fire with Palestinian gunmen. 

Despite extensive gun battles, there were no reports of injuries, and Israeli forces withdrew from Beit Hanoun, a town of about 30,000 Palestinians in the northern Gaza Strip, after six hours. Islamic militants said they detonated explosives near a tank, and reporters saw a deep crater on the outskirts of Beit Hanoun. 

The army said four Palestinians wanted for questioning were arrested, and that there were no casualties among the soldiers. 

The raid came just hours after senior Israeli and Palestinian officials met to consider ways to reduce tensions. The Israeli team was led by Foreign Minister Shimon Peres and the Palestinian one by Cabinet minister Saeb Erekat. 

They discussed releasing Palestinians from an Israeli chokehold that dates from mid-June, when Israeli forces took control of seven of the eight main Palestinian towns and cities in the West Bank after two suicide attacks in Jerusalem. 

Last month, Israel and the Palestinians agreed that Israel was to turn control of parts of Gaza, along with the West Bank town of Bethlehem, back to Palestinian security, as a test case for easing tensions in the West Bank. 

Israel pulled its troops out of Bethlehem but charged that in Gaza, the Palestinians did nothing to stop militants from carrying out attacks, and the plan was not implemented there. Palestinians charged that Israel was stalling and trying to sabotage the agreement. 

At the Tuesday meeting, it was agreed that Israeli Defense Minister Binyamin Ben-Eliezer and the Palestinian security chief, Interior Minister Abdel Razak Yehiyeh, would meet again to discuss handing the Palestinian section of Hebron back to Palestinian control, apparently bypassing Gaza, at least for now. 

Hebron is the only West Bank town that is divided into Palestinian and Israeli-controlled zones. About 450 Jewish settlers live in the center of the city, and Israeli soldiers patrol the zone to protect them. 

Peres said that Israel has no intention of reoccupying Palestinian areas. 

"In every place where you can prove that you are taking responsibility (for stopping terror attacks), we will pull out," Peres told the Palestinians, according to a statement by his office. 

Erekat complained that Israel has not carried out agreements to pull its troops back from Palestinian areas. "We urged them to stop immediately the collective punishments, such as expulsions, arrests and home demolitions," he said. 

Talking to reporters late Tuesday, Palestinian leader Yasser Arafat spoke out against a proposal to appoint a prime minister to take some of his responsibilities. Some Palestinian legislators, unhappy with the state of affairs, have been pressing to reduce Arafat's near-dictatorial powers. 

Arafat agreed that a prime minister could be appointed, but only after a Palestinian state is created. 

The parliament was to vote Wednesday on Arafat's new Cabinet, appointed in June as a step toward reforms demanded by the United States, Israel and many Palestinians. 

Some legislators have said they will oppose the Cabinet. They say that while Arafat appointed five new ministers, he did not dismiss those tainted with suspicion of corruption. 

However, Arafat said that according to Palestinian law, the parliament vote must be over approval only of the five new Cabinet ministers and not the whole Cabinet.