An Israeli airstrike in northern Gaza killed two Palestinians and wounded four others Wednesday, Palestinian security officials and medics said, as President Bush arrived in the Mideast to try to build momentum for stalled peace talks.

The Israeli army said it had targeted militants in the area firing projectiles at the rocket-scarred southern Israeli city of Sderot.

Danny Dahan told Army Radio that a rocket tore through the ceiling of his Sderot home and landed on his son's bed.

"Rockets have been raining on this town for years and no one is doing anything," a crying Dahan told the radio, speaking from the hospital where he was treated for shock. He did not suffer any serious injuries.

Members of the Hamas-allied Popular Resistance Committees told Hamas television that members of their group were firing salvos before the Israeli strike.

Israel is pursuing a peace agreement with the moderate Palestinian government of President Mahmoud Abbas, who rules from the West Bank. At the same time, it is battling Hamas, which seized control of Gaza in June after routing Abbas' forces. The U.S. and Israel consider Hamas a terrorist group.

At a November peace conference in Annapolis, Md., Israel and the Palestinians pledged to try to reach a final agreement before Bush leaves office.

"I come with high hopes," Bush said as he began his first presidential visit to Israel on Wednesday. "And the role of the United States will be to foster a vision of peace. The role of the Israeli leadership and the Palestinian leadership is going to do the hard work necessary to define a vision."

In Gaza, thousands of Palestinian hard-liners staged small Bush protests, underscoring the deep political split with West Bank moderates who have welcomed his visit as an important gesture to the Palestinians.

Supporters of the Islamic militant Hamas chanted "Death to America," and burned U.S. and Israeli flags. A shadowy Al Qaeda-inspired group appeared in public for the first time with rifles and rocket-propelled grenade launchers, and uttered vague threats against U.S. targets.

In Hamas-ruled Gaza, about 5,000 supporters of the Islamic militant group marched in the streets to protest the visit, burning effigies of Bush and Israeli Prime Minister Ehud Olmert.

"America has declared war on the people and imposed an unjust, murderous siege on our people," Mushir al-Masri, a Hamas leader, told the crowd, referring to U.S. support for Israel's virtual closure of Gaza since Hamas seized control of the territory by force in June.

Even supporters of Abbas were critical of the U.S. leader. Some 200 supporters allied with Abbas' Fatah movement and other secular Palestinian factions urged Bush to abandon what they said was his pro-Israel bias.

"We call on President Bush in his visit to adopt an equal standard, and not to continue the biased policy in favor of the occupation government," a senior Fatah leader in Gaza, Zakariya al-Agha, told the marchers.

Bush's challenge is to convince skeptical governments that, with just a year remaining in his presidency and Americans deep in the process of selecting his successor, he is willing to devote the time and effort necessary to bridge decades of differences in this troubled region.

Expectations of success are low, and no one is predicting breakthroughs during Bush's eight-day visit to Israel, the West Bank, Kuwait, Bahrain, United Arab Emirates, Saudi Arabia and Egypt.

Olmert and Abbas agreed in a meeting Tuesday to overcome disputes over Israeli construction in contested areas and ongoing violence and finally instruct their negotiators to begin tackling the core issues of a final peace agreement.

An Olmert ally said Wednesday that he believed Bush's visit would help the sides reach an agreement.

"I am happy that we are beginning to talk on the subjects that perhaps we should have begun to talk about earlier," Vice Premier Haim Ramon told Army Radio. "Both sides pay heed to his (Bush's) requests and his wishes and his visit will certainly accelerate the talks."

Abbas aide Saeb Erekat said that Bush's visit is important as a show of support for the negotiations. "We don't expect President Bush to come here and conduct the negotiations between us and the Israelis, and we don't expect President Bush to make the decisions required by us and the Israelis," he said.

Meanwhile, Secretary of State Condoleezza Rice said in an interview published Wednesday that the U.S. considers a disputed Israeli neighborhood in east Jerusalem to be a "settlement" and that the United States opposes the project.

Rice's comments, published in The Jerusalem Post daily, marked the U.S. administration's strongest criticism yet of Israeli policies in disputed east Jerusalem. The Palestinians are expected to put settlements at the top of their agenda when they meet Bush on Thursday.

Israeli-Palestinian peace talks have been overshadowed by Israel's decision last month to build 300 more apartments in Har Homa, an Israeli neighborhood being built in east Jerusalem. Some 7,000 Israelis already live in Har Homa.

"Har Homa is a settlement the United States has opposed from the very beginning," Rice said.

In the southern Gaza town of Khan Younis, about 20 masked supporters of an Al Qaeda-inspired group, the so-called "Army of the Nation," displayed weapons in a first public appearance.

A spokesman for the group, who only gave his nom de guerre, Abu Hafs, said Bush was "not welcome" in the Palestinian territories. "We are coming, not to Bush in Tel Aviv, but God willing to Washington," he said.

He described members of the terror network Al Qaeda as "brothers," with similar methods and ideology, but added that "there is no complete connection" to his group.

In recent months, several Al Qaeda-inspired groups have emerged in Gaza, though possible links to the terror network are murky. An almost complete closure of Gaza since the Hamas takeover in June has driven Gazans deeper into poverty, creating fertile ground for militant groups.

On Wednesday, some Gazans recalled the visit of President Bill Clinton to Gaza in 1998. At the time, peace hopes ran high, and he was given a hero's welcome.

"We were full of joy and hope on that day (of Clinton's visit)," said Shawki Abdel Rahman, 59, a retired teacher, who watched Bush's arrival on a large-screen TV in a Gaza electronics store.

"Today, it's the opposite," he said. "There is no peace and no joy over this visit."