Israeli troops launched a sweeping raid on this West Bank city early Monday, killing a 9-year-old boy and three Hamas gunmen and leaving 60 people homeless after blowing up their apartment building, the army and Palestinian sources said.

The raid came hours before Israeli and Palestinian peace negotiators headed to Geneva to sign an unofficial peace plan, and days before Palestinian militants were to meet in Cairo for cease-fire talks.

It also coincided with the visit by U.S. envoy William Burns (search), who is in the region trying to restart long-stalled peace talks.

Meanwhile, Israel began construction of a new neighborhood in disputed East Jerusalem, a move U.S. and Palestinian officials said was a violation of the so-called road map peace plan. Sponsors of the neighborhood said the development would include 550 housing units, a hotel and schools.

The road map, meant to end three years of violence and pave the way for an independent Palestinian state by 2005, forbids any new Israeli "settlement activity." Israel, which seized East Jerusalem in the 1967 Mideast war, says the entire city is its unified capital.

Meanwhile, Egyptian-sponsored cease-fire talks between the Palestinian government and militant groups were delayed at least until Wednesday. The talks were supposed to begin Tuesday. Palestinian Prime Minister Ahmed Qureia (search) hopes a truce will lead to a renewal of peace talks.

In Ramallah, more than 60 tanks, jeeps and armored personnel carriers entered the city after midnight, carrying out house-to-house searches, arresting people and engaging militants in gun battles, Palestinian security officials said.

The army said the raid targeted the Hamas infrastructure in the Ramallah area, which it says is behind attacks that have killed more than 60 Israelis in the last three years of fighting.

Soldiers shot the armed militants during a battle that erupted in the Al-Amari refugee camp in Ramallah, the army said. The army confirmed two deaths and said it found an explosives belt and two stashes of explosives where the militants were taking cover.

Residents protested in the streets. Troops opened fire to disperse the crowd, killing 9-year-old Mazen Hamdan, Palestinian sources said. The army said it was investigating.

A third militant was killed in a building in the al-Masyoun neighborhood of Ramallah, not far from the Palestinian prime minister's office. The militant was killed after throwing a grenade at troops, the army said.

Israeli troops evacuated residents, later giving them 15 minutes to collect their belongings. Two hours later, soldiers blew up the four-story building and a nearby cottage the militant had used for cover. Sixty people were left homeless, residents said.

"We believed there were still terrorists in the building so we had no choice but to blow it up," said Col. Roni Numa, who commanded the Israeli operation. But Numa said troops had not been fired on for several hours before blowing up the building.

Palestinian witnesses said dozens of people were arrested, including a Hamas leader, Ghassan Abassi. Israeli military officials confirmed "a number" of arrests, and said they had uncovered an explosives laboratory, which the army destroyed.

Palestinian leader Yasser Arafat has been holed up in Ramallah for two years, and Israel has threatened to expel him in the past.

The army said the raid was "nothing unusual." It said it had informed the Palestinian Authority of the raid beforehand and that there was no plan to enter Arafat's compound or confront Palestinian forces.

An Israeli official, speaking on condition of anonymity, denied the raid was timed to coincide with the signing of the Geneva Accord, which Prime Minister Ariel Sharon has called subversive. The official said the raid was part of Israel's "ongoing war on terrorism."

Senior Palestinian peace negotiator Saeb Erekat called on Israel to stop raiding Palestinian towns and villages, saying such actions undermine attempts to revive the peace process and efforts to arrange a cease-fire.

"We urge the Israeli government to stop the policy of incursions, assassinations, settlements, walls, fait accompli policies and to give dialogue and peace a chance," Erekat said.

Israeli Defense Minister Shaul Mofaz met early Monday with Burns. The U.S. envoy is in the region trying to revolve the stalled "road map" peace plan, which envisions the formation of a Palestinian state by 2005.

"The road map is the basis for the continuation of talks with the Palestinians ... with an emphasis on dealing with the terrorist infrastructure," Mofaz said.

Burns said "the United States is determined to do everything that we can to help."

Dozens of Israeli and Palestinian politicians, local celebrities and journalists gathered in Geneva for a ceremony launching the "Geneva Accord (search)." Former President Jimmy Carter was among the expected attendees.

The unofficial peace plan, reached with Swiss backing, was worked out during two years of secret negotiations between Israeli opposition figures and Palestinians.

The deal proposes borders between Israel and a future Palestinian state close to Israel's borders before the 1967 Mideast war, giving the Palestinians almost all of the West Bank and Gaza Strip and part of Jerusalem.

In return, the Palestinians would largely give up their "right of return" to areas lost during the 1948-49 war that followed Israel's establishment.