Israel disclosed plans Thursday to build nearly 300 homes in West Bank settlements, despite a freeze on construction required by a U.S.-backed peace plan. Palestinians condemned the project and urged the United States to intervene.

An associate of Yasser Arafat, meanwhile, said the Palestinian leader was unnerved by an army raid near his compound this week, and clenched a submachine gun while declaring he felt the "smell of paradise."

Israel has said it would "remove" Arafat at an unspecified time, but has not explained whether this means expulsion or assassination. Israeli Prime Minister Ariel Sharon (search) said this week that Arafat is the major obstacle to peace, but in an earlier newspaper interview backtracked from threats to expel the Palestinian leader.

Late Thursday, three Israelis were slightly wounded in a Palestinian shooting attack in the Gaza Strip, settlers and rescue services said. The gunman was killed, settlers said.

The militant group Islamic Jihad (search) claimed responsibility for the attack for the attack near the Kissufim crossing point between Gaza and Israel. The Israeli military had no immediate comment.

The construction of 273 apartments in West Bank settlements was disclosed Thursday by Israel's Housing Ministry, which published an Israeli newspaper ad inviting contractors to bid on them. The apartments are slated for Karnei Shomron, a settlement deep in the northern West Bank, and Givat Zeev, on the outskirts of Jerusalem.

"The Housing Ministry builds all over Israel, including the West Bank," ministry spokesman Kobi Bleich said. "This tender is in line with a decision taken by the government of Israel."

The U.S.-backed "road map" plan requires a freeze on construction in the roughly 150 Jewish settlements in the West Bank and Gaza Strip. Palestinians hope to establish an independent state in the two territories, which Israel captured during the 1967 Middle East war.

The Palestinians also have not implemented road map obligations — mainly that they disarm and dismantle militant groups — and the plan is stalled, with each side blaming the other, violence continuing and contacts almost entirely cut off.

The construction "is a reflection that this Israeli government has chosen the path of settlements and dictation rather than peace and negotiation," said Saeb Erekat, the chief Palestinian peace negotiator. "We urge the Bush administration to stop this policy, because this is obstacle No. 1 to peace."

Asked about the new settlement activity, U.S. State Department spokesman Adam Ereli said in Washington, "We have made our policy clear, which is that, under the road map, Israel has made a commitment to stop settlement activity. Sticking to that commitment is important."

The Israeli government says it needs the new buildings because of the "natural growth" of the settlements. However, the "road map" does not take that into account in its blanket building freeze.

A senior Israeli official, speaking on condition of anonymity, said all the units were in existing communities and did not involve the confiscation of Palestinian land.

The more than 220,000 settlers living in the West Bank and Gaza provide a strong base of support for Sharon's government, and a settlement freeze poses political difficulties. The housing minister, Effi Eitam (search), is a hard-line advocate of the settlers.

Earlier this month, the government announced it would build 565 new homes in West Bank settlements, most of them in the ultra-Orthodox Jewish community of Beitar Illit outside Jerusalem.

Meanwhile, an aide who visited Arafat on Tuesday night said Arafat was jittery as Israeli forces surrounded a mosque about a half-mile from his Ramallah headquarters.

Arafat, who has been confined to his compound in the West Bank town for nearly two years, feared Israeli troops might come after him, the aide said, declining to be identified. Arafat, who was holding a submachine gun in addition to his pistol, closed windows and shouted orders at his guards to take up positions.

When the aide told him the Israeli operation was small, Arafat said, "You don't know them. I do, so I have to be careful," the aide said.

Arafat then insisted he would not be taken alive if the Israelis try to expel him.

"I feel the smell of paradise," Arafat reportedly said.

Elsewhere in the West Bank, masked Palestinian gunmen killed two Palestinians accused of being informants for Israel and displayed their bodies in the central square of the Tulkarem refugee camp.

The militants released a videotape of what they said was a confession by the two men. In the recording, which runs more than 30 minutes, the two, dressed casually and sitting next to each other, talk calmly to the camera. They say the information they gave to Israeli intelligence led to the deaths of several militants from Islamic Jihad and the Al Aqsa Martyrs' Brigades (search), a militant group loosely linked to Arafat's Fatah (search) faction.

A member of Al Aqsa said the men were kidnapped two weeks ago and interrogated by Islamic Jihad, an Iranian-funded group that often cooperates with Al Aqsa in the West Bank. The Al Aqsa member said the two groups carried out the killings together "to share the honor."

Israeli intelligence makes frequent use of Palestinian informants to target wanted Palestinians, and dozens of suspected collaborators have been killed by fellow Palestinians during three years of violence.

An Israeli military court, meanwhile, sentenced a 23-year-old Palestinian woman to 320 years in prison for helping plan and carry out an August 2001 suicide bombing at a Jerusalem pizzeria that killed 15 people, including two Americans.