A helicopter strike that killed two Palestinian militants was aimed at a man involved in the slaying of six Israeli soldiers in May, Israel said Friday. Media outlets reported that the man had flaunted the severed head of one of the dead soldiers and the strike was a vengeance killing.

The strike destroyed a car in Gaza City, killing two militants, as thousands of Palestinians demonstrated nearby to demand that Yasser Arafat put an end to corruption in his administration.

The two events late Thursday were tied indirectly to Israel's plan to withdraw from the Gaza Strip (search) next year. The "unilateral disengagement" plan has set off power struggles among the Palestinians, while Israel has stepped up its military activity to try to show it isn't being driven out of Gaza.

The car, a white Subaru, was driving through the crowded Zeitoun neighborhood of Gaza City when it exploded, killing the two men inside. The Islamic Jihad (search) identified them as its members and said one was a local field commander. The group is responsible for many bloody attacks against Israelis.

The military confirmed its helicopters destroyed the car. Israeli security officials said the target of the attack was Hazem Rahim, a local Islamic Jihad commander who seized the body parts of Israeli soldiers killed when a roadside bomb destroyed their armored personnel carrier on May 11 in the same neighborhood.

Rahim was involved in several attacks against Israelis, but the daily Yediot Ahronot said "the act that sealed his fate in Israeli eyes was the desecration of the remains of dead Israeli soldiers."

Television reporters said Rahim seized the head of one soldier and waved it before their cameras. He later tried to negotiate the release of Palestinian prisoners in exchange for seized parts of the Israeli casualties. The parts were returned with the help of Egyptian mediation.

At the time, Chief of Staff Moshe Yaalon pledged to hunt down those involved in the incident, saying, "We will show no forgiveness toward those who are responsible for [what happened to] the bodies."

The army said one of the militants in the car was planning an attack against Israelis.

On Friday, witnesses said a man in Beit Hanoun (search) in the northern Gaza Strip was killed by militants whom he saw burying an anti-tank mine near his house on a track used by Israeli patrols. Palestinian security sources said, however, the man was killed by Israeli fire.

According to Prime Minister Ariel Sharon's disengagement plan, Israel is to evacuate all 21 Israeli settlements and withdraw forces from the crowded, poverty-stricken seaside territory by late next year.

Egypt is trying to organize a conference to coordinate the pullout, involving the United States, Israel and the Palestinians, fearing chaos in Gaza.

However, Israel has refused to negotiate with the Palestinians over the pullout, charging that the Palestinian leadership is not moving to stop attacks against Israelis.

"Until they do it, I don't see now that we're moving toward a new summit [meeting]" in the coming months, said Israeli Foreign Minister Silvan Shalom on Thursday after meeting with European Union foreign policy chief Javier Solana (search) in Tel Aviv.

The United States shares Israel's misgivings about Arafat's leadership, but a U.S. official, speaking on condition of anonymity, said the United States backs the idea of a coordination conference.

Arafat was the target of internal unrest again Thursday, as thousands of Palestinian demonstrators marched through the streets of Gaza City calling on Arafat to agree to fundamental reforms in the Palestinian Authority (search).

The demonstrators, many of them armed, marched to the Palestinian National Council (search) building, waving banners and chanting slogans demanding that Arafat put an end to corruption.

"The leader should listen to his people who respect and love him," the banners read. "No to corruption, yes to real reform."

Palestinian Prime Minister Ahmed Qureia has stood by his intention to resign because Arafat refuses to relinquish control of security services.

At the Gaza demonstration, Samir Mashrawi, a member of Arafat's Fatah faction, said he supports Arafat, but he warned that the patience of the Palestinian people is running thin.

"We should not accept any more corrupt people and we are not going to accept any more corrupt people after today," he said.