Updated

Israeli troops fired from tanks and helicopter gunships at Palestinian gunmen holed up in a West Bank house Wednesday, killing one man and wounding two in an incursion into a Palestinian-controlled town. In a separate raid, Israeli troops arrested 17 suspected militants in a West Bank village.

Despite the fighting, Palestinian officials said Israel eased some restrictions, permitting the rebuilding of the landing strip at Gaza International Airport which Israeli forces destroyed this month, and agreeing to reopen the border crossing between the Gaza Strip and Egypt.

Troops also opened roads in and out of the West Bank town of Jericho, but barriers around other Palestinian communities remained in place.

Israeli Foreign Minister Shimon Peres said he believed Palestinians and Israelis can now resume peace talks after 15 months of violence, and that the worst is behind them.

"I think that the chances for peace had reached the lowest point, the zero point, in relations between the Palestinian Autonomy and Israel," Peres said during a visit to the Ukraine. "I think we have departed from the zero point and begun to move."

However, the moderate Peres does not necessarily speak for hardline Prime Minister Ariel Sharon. Earlier this week, after Peres and Palestinian Parliament Speaker Ahmed Qureia confirmed they have been talking about the terms of resuming peace talks, Sharon angrily denied knowledge of the contacts. Only later did Sharon confirm he knew about the Peres-Qureia talks.

Sharon is under growing pressure from his right-wing Likud party not to make any concessions to the Palestinians, seen as unavoidable if peace talks resume.

Environment Minister Tsachi Hanegbi, chairman of the Likud's central committee, said Wednesday he wants to convene the body of about 3,000 members to pass a resolution opposing the establishment of a Palestinian state. The move is aimed against Sharon, who has said a Palestinian state is inevitable, but that Israel must try to keep its dimensions small.

Israeli and Palestinian security commanders met Wednesday at the Erez crossing between Israel and Gaza Strip, their first talks in a week.

The two sides agreed to reopen the Rafah crossing between Gaza and Egypt, which had been closed off and on during 15 months of fighting, said the Palestinian police chief in Gaza, Maj. Gen. Abdel Razek Majaidie. Israeli military officers, speaking on condition of anonymity, confirmed that the Rafah crossing would be open longer hours, and restrictions would be eased on Gaza roads.

Majaidie said Israel also agreed to let Palestinians rebuild the landing strip at Gaza International Airport, which Israeli bulldozers tore up earlier this month as part of a campaign to prevent Palestinian leader Yasser Arafat from traveling abroad, reprisal for Palestinian attacks against Israelis. The Israelis said they had no objection to the repairs.

However, Raanan Gissin, Sharon's spokesman, said that despite the airport reopening, Arafat would not be allowed to travel until Palestinian police arrest the assassins of an Israeli Cabinet minister gunned down in October. Arafat has been stuck in the West Bank town of Ramallah since Dec. 3, when Israel destroyed his helicopters in a reprisal raid after Palestinian suicide bomb attacks in Jerusalem and Haifa.

In the West Bank town of Jenin, a gunfight erupted Wednesday after Israeli troops said they spotted several armed Palestinians and chased them into a building in town. Israeli tanks drove about 300 meters into Jenin, residents said.

The military said soldiers encircled the house, and a gun battle ensued. Tanks fired two shells at the building, and helicopter gunships also opened fire. Palestinian officials said a 50-year-old Palestinian was killed and two others were wounded, including a policeman. The army said one of those hit by Israeli fire was armed.

Earlier Wednesday, Israeli troops entered the village of Azun, which is under joint Israeli-Palestinian control, and arrested 17 suspected militants, the army said. Five of those arrested were Palestinian policemen, according to the mayor.

Israeli police at a Gaza Strip checkpoint Wednesday wrestled and punched American and European demonstrators trying to enter the strip for a two-day visit to show solidarity with Palestinians, protesters said.

After being told they could not enter, some of the 90 demonstrators left their buses and tried to walk across the border with their hands up in the air but were turned back again.

Speaking by mobile telephone, Brian Wood, 26, from Denver, Colo., said that civilian police and paramilitary border guards wrestled some of them to the ground and punched others, including him, in the face.

Police spokesman Gil Kleiman said officers, called in by the army to remove the demonstrators, did not beat any of them, and police used force only to lift those who resisted into the buses from the street.