Four Palestinians were killed when a bomb they were planting went off in northern Gaza, and Israel's prime minister indicated that Israel will keep targeting militants for death despite international peace efforts.

At first, Palestinian security officials said Israeli tanks fired shells late Sunday at a group of militants from the Al Aqsa Martyrs' Brigades (search), affiliated with the mainstream Fatah, killing three men and wounding four others in the town of Beit Hanoun. Another died later in a hospital, doctors said.

However, loudspeaker trucks later drove through the area saying that the four died while "fulfilling their national duty," a phrase used in the past to announce accidental deaths. Israeli military sources said on condition of anonymity that the militants were on their way to plant a bomb and it went off prematurely.

In Jordan, Secretary of State Colin Powell said Sunday the killing of a Hamas (search) leader by Israeli troops could impede fulfillment of the U.S.-backed "road map" to peace.

Powell said the peace process must continue, despite the shooting Saturday of Abdullah Kawasme, 43, a leader of the Hamas militant group in the West Bank town of Hebron.

"We cannot allow ourselves to be stopped because of these incidents," he said.

Powell met with diplomats from the other three members of the Quartet of Mideast mediators -- the European Union, United Nations and Russia -- to try to rescue the plan.

After the meeting, the Quartet members, in a strongly worded statement, said they "deplore and condemn the brutal terror attacks against Israeli citizens carried out ... since the road map's presentation," including a homicide bombing in Jerusalem on June 11 that killed 17 and Friday's gunfire attack on a car in the West Bank, killing a dual U.S.-Israeli citizen.

The statement did not condemn Israel's extrajudicial killing of Palestinian militants, while criticizing "Israeli military actions that result in the killing of innocent Palestinian and other civilians."

While the "road map" (search) plan does not specifically rule out "targeted killings," as the Israelis call the assassination of suspected Palestinian militants, it says Israel must refrain from "actions undermining trust."

Israel has claimed the right to take out "ticking bombs," which it defines as terrorists carrying explosives as well as leaders who recruit and send them on missions.

The latest Palestinian leader to be killed was Kawasme. The Israeli military said he was shot Saturday when he pulled a gun on soldiers trying to arrest him. Palestinians said he was unarmed.

Israel charged that Kawasme was responsible for attacks that killed 35 Israelis, including the June 11 homicide bomb attack in Jerusalem.

At a Cabinet meeting, Sharon praised the military for its "important achievement" in killing Kawasme, indicating his support for the controversial policy.

Hamas threatened to avenge the killing, which came at a time when Palestinian Prime Minister Mahmoud Abbas and Egypt are pressing the violent Islamic groups to accept a hiatus in attacks against Israelis as part of the road map plan.

A Hamas leader said a reply to an Egyptian initiative for a limited cease-fire could come as soon as Monday, an Israeli newspaper reported.

Early Monday, about 15 tanks entered the town of Qarara in central Gaza and surrounded the house of a Hamas leader, security officials said.

Israel's military chief revealed that the security forces had discussed killing Palestinian leader Yasser Arafat.

Speaking to a chamber of commerce conference Sunday night, army chief of staff Moshe Yaalon said that "the question of why we didn't kill Arafat is worth a discussion."

This is the first time that a senior Israeli official has openly discussed plans to assassinate the veteran Palestinian leader who has been confined in his partially destroyed compound in the West Bank city of Ramallah for the last 18 months.

"There were discussions about it in the past, but after weighing up the gains and benefits ... we rejected the idea outright," Yaalon said.

Sharon also told his Cabinet on Sunday that Israel could build inside existing settlements as long as it keeps quiet about it, despite a road map clause to the contrary.

Sharon aide Raanan Gissin said that despite the road map language about "freez(ing) all settlement activity including natural growth of settlements," Israel had an "understanding with the Americans that inside the settlements, for the day to day needs, we can build," giving examples of extra rooms or kindergartens. He said the understanding was part of a document but would give no details.

Gissin insisted that the road map ban was only on construction of new settlements, and Israel was removing unauthorized outposts. He said the issue of existing settlements would not arise until after all violence stops.

About 220,000 Israelis live in 150 West Bank and Gaza settlements authorized over the decades by successive Israeli governments. In addition, settlers have put up dozens of tiny, unauthorized outposts, many of them vacant. The road map says they must be removed.