Palestinians in a car near Gaza City Sunday narrowly escaped an Israeli helicopter missile attack on their vehicle, blasted into a heap of smoldering metal seconds after they jumped out, witnesses said.

The attack was an apparent attempt to kill Palestinian militants belonging to the Islamic Jihad group, Israeli media reported. The Israeli army would not comment.

During two years of Palestinian-Israeli violence, Israel has killed dozens of suspected militants in what it calls "targeted attacks," claiming that it is preventing terror strikes. Palestinians charge that the practice amounts to assassination of their leaders, and human rights groups call it summary execution without judicial process.

The two passengers of the Mercedes sedan saw the Israeli helicopters overhead and managed to flee the vehicle before it was hit, witnesses said.

"Suddenly I saw a Mercedes driving fast down the road and it was hit by flames coming from the sky," said Amina Daalasa 55, who lives nearby. Two missiles hit the car and one missed, hitting the road, Daalasa said.

The air strike came after two Palestinians were killed Saturday night as Israeli tanks and troops entered the northern Gaza town of Beit Lahiya and demolished three homes. One of the Palestinians, a 70-year-old man, unable to leave a home before Israeli bulldozers began toppling it, was buried under the rubble, witnesses said.

An army spokesman, Capt. Jacob Dallal, said soldiers routinely call on residents to evacuate buildings and troops search the premises before structures are destroyed.

The forces demolished three homes belonging to militants of the Islamic Jihad group who were responsible for attacks that killed 24 Israelis, the army said.

One Palestinian bystander who was watching from his balcony was shot dead during an intense exchange of gunfire, Palestinian witnesses said. The army said soldiers shot at and hit armed Palestinians.

Security alerts disrupted life in Israel Sunday. Citing warnings of terror attacks, police canceled a soccer game in Jerusalem, then relented and allowed it to be played. Also Sunday, police stopped buses from traveling for several hours on a main road in Israel's north where suicide bombers have blown up several buses in the past. The ban was canceled after the security alert was lifted, Israel Radio reported.

Also Sunday, Egyptian Foreign Minister Ahmed Maher told a visiting Israeli official that there is a good chance that Egypt will succeed in forging a cease-fire declaration by the mainstream Fatah movement and the Islamic Hamas group.

Maher told Yossi Katz, a representative of Amram Mitzna, the moderate candidate for prime minister in Israel's Jan. 28 elections, that the chances for a cease-fire declaration by Fatah and Hamas were 75 percent, a Katz aide said. The two groups have held several meetings in Cairo, but no agreement has been reached.

Hamas has been responsible for dozens of suicide bombing attacks in Israel, and a militia linked with Fatah has also claimed responsibility for many attacks.

The meeting on Sunday was the first meeting between a Mitzna aide and Egyptian official since Mitzna was chosen as the new head of the Labor Party on Nov. 19.

Katz also met with Osama el-Baz, a senior aide to Egyptian President Hosni Mubarak. The meetings brought charges of Egyptian interference in the Israeli election campaign from Prime Minister Ariel Sharon's Likud party, but both Katz and the Egyptians rejected them. Maher said Egypt wants to maintain a good dialogue and help peacemaking efforts, according to Katz's aide.

Speaking to The Associated Press by telephone from Cairo, Katz said, "Egypt wants to be involved in the peace process and is making efforts to try to stop the acts of terror."

Mitzna has won some praise among Palestinians for saying he would pull settlers and soldiers out of the Gaza Strip and would unconditionally restart negotiations with the Palestinians if elected prime minister.

Without mentioning Mitzna or Egypt, Sharon told party activists on Sunday that he hoped his rivals would not "try to find refuge and support outside our borders among those whose interests go against those of our people and country," warning of harm to Israel's interests.

Polls indicate Sharon and his Likud Party will win the January election, riding a wave of Israeli disillusionment with peace negotiations because of two years of bloody unrest. Sharon insists that all violence must stop before peace talks resume.