Israeli soldiers shot and killed four Palestinians on Monday in the Gaza Strip, at least two of them armed, and Israel eased a key travel restriction in the West Bank.
Palestinian leader Yasser Arafat, meanwhile, accepted an invitation from British Prime Minister Tony Blair to send a delegation to London to discuss Mideast peace prospects, Palestinian negotiator Saeb Erekat said. Neither side gave details about who would make up the delegation.
Arafat has been confined to his Ramallah office for a year. Israel has said he may leave, but he might not be allowed to return.
British consul Geoffrey Adams gave Arafat a letter from Blair inviting the delegation early next year, Erekat said, noting "the British Prime Minister's ... conviction to continue exerting every possible effort to revive the peace process, something President Arafat welcomed."
Israeli-Palestinian peace talks have not taken place for nearly two years.
In Gaza, where armed clashes are a daily occurrence, Israeli soldiers opened fire on two Palestinians near the fence dividing Gaza from Israel, killing them. Israelis and Palestinian witnesses said arms and ammunition, including grenades and bombs, lay next to the bodies after a long gunbattle.
The Israeli military said soldiers thwarted a Palestinian attempt to infiltrate and carry out a terror attack in Israel. The violent Islamic Hamas claimed responsibility.
In the southern part of the Gaza Strip, another Palestinian was killed during a gunfight between armed Palestinians and Israeli soldiers guarding a Jewish settlement, the army said. Palestinians said the man was a farmer, not a gunman.
In Rafah, next to the Gaza-Egypt border, a Palestinian was shot dead Monday night when he approached an army patrol, Palestinians said.
Israeli security sources said that troops shot and killed a man running toward them in the darkness. The soldiers believed he may have been carrying explosives and would wait until daybreak before fully examining the scene, the sources said.
Also in Rafah, Israeli tanks and bulldozers knocked down 16 shacks. Palestinians said more than 200 people were left homeless. The Israelis said the structures were empty, used by Palestinian gunmen for firing at Israeli positions.
Clashes at the border are frequent. Israel accuses the Palestinians of smuggling weapons in from Egypt, using tunnels that terminate inside houses in Rafah.
In the West Bank, restrictions are even tighter, because the absence of a border fence has made it relatively easy for dozens of suicide bombers and other attackers to sneak into Israel and set off bombs, killing and wounding hundreds.
Shortly after violence erupted in September 2000, the Israeli military put up roadblocks all over the West Bank, banning Palestinians from traveling, crippling the Palestinian economy and imposing severe hardships on the people.
On Monday, Israel announced it would allow Palestinians to run buses between towns and cities again, restoring service that has been cut off for more than two years, a key move to ease travel restrictions.
Palestinian bus companies said the service was to resume Tuesday. However, strict security measures will be enforced, and long delays were expected.
At Israeli military roadblocks, the buses will have to stop, the passengers will have to get out and pass security checks and then board a different bus, according to a Palestinian bus company owner who received instructions from the army.
Even so, Palestinian officials said the resumption of bus service would help stimulate the ruined Palestinian economy, making it possible for some people to get to their jobs.
Meanwhile, corruption charges clouded the Israeli political scene, six weeks ahead of general elections, set for Jan. 28.
Several activists from Prime Minister Ariel Sharon's Likud Party testified at the police fraud squad headquarters that the process of choosing the party's list of candidates for parliament was tainted by payoffs.
The selection for a high spot on the list of the unknown 27-year-old daughter of an Israeli suspected of underworld ties, but never convicted, spurred criticism of the system by which the party's 2,940-strong central committee chooses the candidates, opening the way for bribes.
Meanwhile, the other main party, Labor, also faced an investigation over alleged ballot-box stuffing during its primary election last week.