Israeli troops killed two Palestinian militants in a shootout Friday, while Palestinian leader Mahmoud Abbas' Fatah (search) movement made an unexpectedly strong showing against rival Hamas in local elections in dozens of West Bank towns and villages.

Hamas complained that many of its candidates were detained by Israeli troops before Thursday's election. The arrests are part of Israel's weeklong campaign against militants, triggered by rocket fire from Gaza (search) on Israeli border towns.

Armed groups have threatened revenge, and an informal seven-month-old truce could collapse as a result of the escalation.

Pressing forward with the military campaign, Israeli soldiers raided the Balata (search) refugee camp outside the West Bank city of Nablus early Friday, searching for wanted Palestinians. Gunmen shot at the soldiers, who returned fired, the army said.

Two Palestinians were killed and another seriously injured, according to witnesses and Palestinian officials. The gunmen were from the Al Aqsa Martyrs' Brigades, a militant group with ties to Fatah.

Israeli Defense Minister Shaul Mofaz has said the wave of air strikes, arrests and targeted killings was meant to show militants Israel would not tolerate any attacks from Gaza in the wake of its pullout from there earlier this month. Mofaz and top army commanders decided Thursday that strikes would continue at least for several more days.

In the West Bank, local elections were held Thursday in 104 towns and villages, with a total of 376,000 residents, or a little more than 10 percent of Palestinians in the West Bank and Gaza. It was the third of four rounds of municipal elections. No date has been set yet for the final vote in the largest Palestinian cities.

Jamal Shobaki, head of the Local Elections Commission, said Fatah took control of 61 councils, while Hamas won 28. Other parties and independents won 15 councils, said Shobaki, a leading Fatah member.

Final results showed Fatah winning 54 percent of the vote, compared to 26 percent for Hamas.

It was a relatively strong showing for Fatah, the ruling party for more than a decade, against initial predictions of a continued rise of Hamas. Many voters had said they want to punish Fatah for widespread corruption and would choose Hamas in hopes of getting clean government. In local voting, Hamas' violent ideology is not considered an issue.

Results in local elections are not necessarily a clear reflection of the respective strengths of political parties because many vote according to clan membership, not party affiliation. The biggest contest between Hamas and Fatah will come in parliament elections in January.

Palestinian negotiator Saeb Erekat, of Fatah, said Thursday's vote was not necessarily a predictor of parliamentary elections.

"The issue of January elections cannot be isolated from the results today, but we can't say it will be an exact copy," he said.

Sami Abu Zuhri, a Hamas spokesman in Gaza, said he did not trust the accuracy of the preliminary results, and that Hamas would soon publish its own count. In previous rounds, Hamas and Fatah released different figures, in part by each claiming independent lists as affiliates.

Abu Zuhri also said Hamas suffered as a result of the recent Israeli arrest campaign in which more than 400 Palestinians, the bulk Hamas supporters, were rounded up this week.

The Israeli offensive raised pressure on Abbas to act against militant groups and armed gangs, which operate openly in Gaza. Israel says there can be no peace talks until the groups are disarmed.

On Thursday, police in Gaza began enforcing a ban on the public display of weapons and arrested three people. However, such initiatives have quickly fizzled in the past. Abbas said he wants militants to keep their weapons at home, but that he won't disarm them.

The Palestinian police chief, Ala Husni, said that in the wake of Israel's recent pullout from Gaza there is no longer a reason for anyone other than security officers to carry weapons publicly. "The role of resistance weapons has ended in the streets. They should go back into storage and they should not show up in the streets," he told a news conference.

Interior Ministry spokesman Tawfiq Abu Khoussa said authorities arrested three men carrying Kalashnikov assault rifles Thursday and confiscated their weapons. Several security officers also were arrested for carrying guns while off duty, he said.