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Israel should withdraw from more of the West Bank (search) after a small-scale pullback set for 2005, Israel's vice premier said in an interview published Thursday — one of the first indications of Israel's long-term intentions.

In the Gaza Strip (search), five Palestinians were killed by Israeli fire during an army raid aimed at militants firing mortar shells into Jewish settlements.

Also Thursday, Mahmoud Abbas (search), the leading candidate in the Jan. 9 Palestinian presidential election, shook hands with an armed militant leader wanted by Israel during a West Bank campaign stop. The two read prayers for the dead at a West Bank cemetery for those killed in fighting with Israel.

Israel's vice premier, Ehud Olmert, is a confidant of Prime Minister Ariel Sharon (search) and an outspoken supporter of "unilateral disengagement" from the Palestinians. In 2005, Israel plans to leave Gaza and four West Bank settlements.

In the interview, Olmert told The Jerusalem Post that additional Jewish settlements in the West Bank will be removed, even if Israel is not involved in peace talks with the Palestinians.

"There is no option of sitting and doing nothing. Israel's interest requires a disengagement on a wider scale than what will happen as part of the current disengagement plan," Olmert told the Post.

However, Sharon's office did not confirm the plan. "The Prime Minister has not changed his policy and the plan for disengagement. There is nothing beyond that," said Raanan Gissin, an aide to Sharon.

According to the newspaper, Olmert declined to define the extent of the second pullback, but said such a withdrawal was necessary to prevent Israel from being forced to give up all the lands captured in the 1967 Middle East war.

The Palestinians claim Gaza, all of the West Bank and east Jerusalem for their future state. They have been deeply suspicious of Sharon's disengagement plan, fearing it is intended to impose borders and help Israel keep large parts of the West Bank. Such fears were fueled by U.S. assurances to Sharon last year that Israel could not be expected to dismantle large West Bank settlements.

Sharon has acknowledged that one goal of the plan is to solidify Israel's hold on the main West Bank settlement blocs. More than 230,000 settlers live in 150 West Bank settlements, many within the large blocs.

Since the death of veteran Palestinian leader Yasser Arafat in November, Israel has indicated that it would be willing to coordinate the withdrawal with the Palestinians and return to the negotiating table.

But Olmert said the second withdrawal would go ahead regardless of whether peace talks are successful.

"We could very well have negotiations and these negotiations will break down, but Israel will continue to progress, by carrying out unilateral moves, including the possibility of further withdrawals that are in the interest of the state," Olmert said.

It was one of the clearest indications yet from an Israeli leader that the disengagement would be only the first phase of a future Israeli pullback from parts of the West Bank, to make room for a Palestinian state.

Olmert cast doubt on the ability of Abbas to reach a peace deal with Israel.

Abbas, a pragmatist, has spoken out against violence. However, he has indicated he will seek to coopt rather than confront militants, as demanded by Israel and the United States.

Olmert said that without a crackdown, "we don't see much chance for progress with the Palestinian Authority."

Abbas again showed his unwillingness Thursday to confront militants, embracing a well-known militant leader.

Campaigning in the Jenin refugee camp, Abbas was greeted by Zakaria Zubeidi, the local leader of the Al Aqsa Martyrs' Brigades (search), a militant group with ties to Abbas' ruling Fatah party. The two walked to the Martyrs' Cemetery, where dozens of Palestinians killed in the current round of fighting with Israel are buried.

An M-16 assault rifle slung across his back, Zubeidi lifted up Abbas, who then waved to the hundreds of people near the cemetery. Zubeidi and Abbas walked into the cemetery and said the Muslim mourning prayer.

Al Aqsa is responsible for several bombings and scores of shooting attacks that killed dozens of Israelis in more than four years.

In Gaza on Thursday, troops raided the Khan Younis (search) refugee camp, exchanging fire with Palestinian gunmen and uprooting crops. Three Hamas gunmen, a 17-year-old youth and a mentally handicapped man were killed in the fighting, Palestinian officials said.

Deputy Gaza commander Lt. Col. Dotan Razili said his troops targeted gunmen trying to plant explosives devices and launch mortar shells. The army was investigating the report that a mentally handicapped person was shot, Razili. said.

Palestinians said one of the dead was a local Hamas field commander, Yahiyah Abu Baka, 33. Two soldiers were lightly wounded, the army said.