Unknown assailants fatally shot two Israeli settlers hiking in the West Bank on Friday, Israeli rescue services said. The attack followed an Israeli operation overnight in which troops killed a bodyguard for the Palestinians' chief negotiator.

Meanwhile, an official in Israeli Prime Minister Ehud Olmert's office said he has issued a new directive to all government ministries requiring his approval for construction anywhere in east Jerusalem or the West Bank. The official spoke on condition of anonymity because the decision had not been officially announced.

The decision came after several lower-level bureaucratic decisions this month to move ahead with such construction caught Olmert off guard and angered the Palestinians and the United States.

Israeli government spokesman Mark Regev said Friday that Olmert has not called off plans to build the new homes in Har Homa, and has not ordered a halt to all construction in West Bank settlements.

Israel will not confiscate land for new settlement construction and will not "outwardly expand" its West Bank settlements, Regev said, meaning that construction can continue inside the settlements' existing borders. Israel also has canceled financial incentives designed to persuade Israelis to live in the West Bank, Regev said.

"But in the Israeli perspective, the West Bank is not Jerusalem and Jerusalem is not the West Bank," he said.

No Palestinian militant group immediately claimed responsibility for the attack that killed the Israeli settlers, who were both in their 20s. Police and army forces were searching the area for the assailants, police spokesman Micky Rosenfeld said.

In a nighttime raid in the West Bank, Israeli forces shot and killed a bodyguard for Ahmed Qureia, the chief Palestinian negotiator in peace talks only recently relaunched after a violent hiatus of seven years.

Israel has been limiting its operations in the West Bank, ruled by Palestinian President Mahmoud Abbas, as it negotiates a peace agreement with Abbas's moderate government. On Thursday, Qureia announced that peace talks would continue after a spat over Israeli settlements.

But late Thursday, the Israeli military sent a team into a suburb of Ramallah, the seat of Abbas' government, to arrest one of Qureia's bodyguards, a member of the Palestinian security forces who the military said was implicated in armed activity against Israel and had provided weapons to other militants. He opened fire at troops and they fired back, killing him, the military said.

Palestinian security officials denied the 23-year-old bodyguard fired at troops.

Qureia, a former Palestinian prime minister, condemned the operation. Israel is trying to hinder progress in talks "by doing the opposite of its commitments and pledges to the international community, the most dangerous of which is the continuous assassinations of Palestinian fighters," he said in a statement Friday.