Updated

A homicide attacker blew himself up in an Israeli grocery store early Thursday, killing one man, despite an intense push by Palestinian and international leaders to persuade militant groups to end such attacks.

The man was probably waiting to attack a nearby bus or bus stop in the village of Sde Trumot, but panicked and detonated his explosives when the store's owner became suspicious and approached him, police said.

Several hours later, Israeli paratroopers and police began dismantling the West Bank (search) settlement outpost of Mitzpeh Yitzhar (search), the first inhabited Jewish outpost it has targeted in accordance with a new peace plan, military sources said.

About 200 settlers blocked the road with cars and burning tires, according to Army Radio. "There has been some confrontation, some light pushing," a settler who identified himself as Yossi told the radio.

Last week, Israel removed 10 uninhabited outposts. Settler leaders sued to prevent inhabited outposts from being dismantled, but the Supreme Court has rejected many of their arguments.

Taking down the unauthorized outposts and stopping Palestinian attacks on Israelis are key elements in the U.S.-backed "road map" (search) to Middle East peace, which envisions an end to more than 32 months of violence and the creation of a Palestinian state by 2005.

Palestinian Prime Minister Mahmoud Abbas (search) held meetings Wednesday night with the militant groups Hamas (search) and Islamic Jihad to get them to commit to end all attacks. Abbas planned to continue meetings with militant groups for a fourth day on Thursday.

As talks for a Palestinian cease-fire continued, so did the violence.

Palestinian gunmen killed a 7-year-old Israeli girl in a highway ambush Tuesday, and the Israeli army reported a string of overnight attacks on soldiers by Palestinian militants, none of which ended with fatalities.

Early Thursday morning, a bomber carrying a bag filled with explosives entered a grocery store in the Israeli village of Sde Trumot near the West Bank, police said.

The attacker had likely planned to target a bus or a nearby bus stop, and entered the store to wait until the bus stop got more crowded or a bus came, police spokesman Yaron Zamir said.

The store owner, Avner Mordechai, 63, realized the man was a bomber and approached him when the attacker detonated the explosives, killing Mordechai, Zamir said.

"We have no doubt that the store owner paid with his life to save others," Zamir said.

Sde Trumot, a small farming village in the Jordan River valley, is about three miles south of the city of Beit Shean and about the same distance from the northern edge of the West Bank.

The attack occurred hours after the Palestinian premier's separate meetings with the main Islamic militant groups.

In a two-hour meeting with the premier, Hamas leaders left open the possibility it would halt attacks on civilians in Israel, but continued to insist on their right to target Israeli soldiers and settlers in the West Bank. However, serious discussions were underway, Hamas leaders said, reinforcing speculation an accord might be near.

"We are trying to find a solution which is good for all of us," Hamas official Ismail Abu Shanab said.

In their separate meeting, Islamic Jihad leaders also insisted on the right to target Israelis in the West Bank and Gaza, Islamic Jihad leader Abdulla Shami said.

Israel has said it might accept a temporary cease-fire of up to six weeks by the Palestinian militants, but then Abbas must forcefully crack down on the groups.

Finance Minister Benjamin Netanyahu, who was visiting the United States on Thursday, said he told U.S. officials that Israel saw a long-term cease fire as a way for Palestinians to extract concessions from Israel while allowing violent groups to regroup and rearm.

"What we need to see is a dismantling of the terrorist organizations," he told Israel Radio on Thursday.

Participants in the truce talks said Israel's part of a possible cease-fire deal would be a commitment to stop targeted killings of suspected militants.

Raanan Gissin, an aide to Israeli Prime Minister Ariel Sharon, denied that Israel told the United States it would scale back its attempts to kill suspected terrorists.

Last week Israeli helicopters struck three times in Gaza City, targeting Hamas leader Abdel Aziz Rantisi, who was wounded, and commanders and militants of the Hamas military wing. Twenty people, most of them bystanders, were killed. Also last week, a Hamas homicide bomber on a Jerusalem bus killed 17 people.

Gissin said Israel informed the U.S. administration it would continue to attack "ticking bombs," which he defined as terrorists carrying explosives, those who make bombs and send bombers, and militants firing rockets at Israeli villages.

Gissin added that Israel would stop all its military activities in areas where the Palestinians assume responsibility and make a "100 percent effort to stop terror attacks."

In another proposal, Abbas is suggesting a joint political leadership including Hamas and Islamic Jihad, Abu Shanab said.

The leadership would be headed by Palestinian leader Yasser Arafat and operate under the umbrella of the PLO, according to the official Palestine Media Center. Israel and the United States have been trying to sideline Arafat, who retains considerable clout and popularity.

The recent violence underscored the fragility of the road map, launched June 4 by President Bush.

Sharon, speaking to Jewish fund-raisers from abroad on Wednesday evening, said Israel has accepted the road map with reservations, but "moving forward requires a complete cessation of terrorism, violence and incitement." The plan calls for parallel steps -- easing of Israeli restrictions as the Palestinians move to rein in militants.