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An Israeli airstrike ripped through a car in Gaza City on Wednesday, killing two militants accused of helping kidnap a British Broadcasting Corp. journalist in March 2007, officials said.

The men, Islam and Mohammed Yasin, are related and belonged to the Army of Islam, said a Gaza official who declined to be named because of the sensitivity of the matter. The shadowy extremist Muslim group draws inspiration from al-Qaida, though it is not believed to have operational links.

The airstrike left the car in flames in a Gaza street and, in addition to those killed, wounded three people, said Hamas medical official Adham Abu Salmia.

Israel has killed dozens of wanted Palestinian militants -- and a number of bystanders -- in airstrikes over the years. But Israel has greatly scaled back its operations since a fierce military offensive in early 2009.

BBC reporter Alan Johnston was released about four months after his abduction in Gaza.

The Army of Islam was also involved in the capture of Israeli soldier Gilad Schalit in 2006. Schalit remains in captivity in Gaza.

An Israeli military spokesman said Islam Yasin was involved in plans to kidnap Israelis in the Egyptian Sinai, a popular holiday spot. The spokesman, who requested anonymity in line with military guidelines, said Yasin worked under another Army of Islam operative killed in a Nov. 3 Israeli strike.

Hamas controls the Gaza Strip, while the rival Palestinian Authority governs the West Bank.

Wednesday's violence came as Israel and the United States were in a standoff over the terms of a Washington-proposed settlement construction moratorium in the West Bank.

The U.S. hopes that by halting Israeli settlement construction, it can bring the West Bank government back to peace talks. Negotiations broke down in late September, just weeks after they were launched, with the expiration of an earlier Israeli settlement slowdown.

The U.S. wants Israel to halt settlement construction for an additional 90 days. In exchange, it has offered key military and diplomatic incentives to Israel.

But Israel is seeking written assurances that it will not be required to extend the freeze any further, and that east Jerusalem -- the section of the holy city claimed by the Palestinians -- not be subject to building restrictions.

An Israeli official said Wednesday those terms have not been finalized.

U.S. Secretary of State Hillary Rodham Clinton declined to comment Wednesday on the demand for a written guarantee, saying only that efforts to revive the peace talks were continuing.

"We are working intensively to create the conditions for the resumption of negotiations that can lead to a two-state solution and a comprehensive peace," she said during a news conference with British Foreign Secretary William Hague in Washington.

U.S. envoy David Hale met with Palestinian officials in the West Bank on Wednesday to discuss the emerging deal.

Palestinian negotiator Saeb Erekat said the Palestinians would not have any comment until a deal is officially worked out.