A Palestinian terrorist blew himself up and a second terrorist was fatally shot by Israeli soldiers staging a raid Thursday in the West Bank town of Jenin, the worst violence between the two sides in nearly a month.

The bloodshed came as Palestinian candidates campaigned for Jan. 25 parliamentary elections and raised fears it could spark further violence that could hamper future campaign events.

"If this continues, it could seriously undermine the election," said Palestinian negotiator Saeb Erekat. "We urge the United States and others in the international community to ensure that Israel stops such actions and gives us a chance to have free and fair elections."

Recent polls say the terrorist Hamas group, running on a platform of clean government, poses a strong challenge to the ruling Fatah Party. Fatah has been weakened by accusations of corruption and its inability to halt growing lawlessness in Palestinian areas.

Late Thursday, Fatah gunmen demanding government jobs opened fire on Palestinian Interior Minister Nasser Yousef's house and the Palestinian Cabinet building in Ramallah, wounding one of Yousef's bodyguards seriously and two others moderately, Palestinian officials said. One of the attackers was also wounded.

Earlier in the day, Israeli troops hunting for Islamic Jihad terrorists entered Jenin and surrounded two houses, the army and Palestinian security officials said.

Three men in one of the homes surrendered, said Maj. Sharon Esman, a spokesman for the army's central command.

Two men in the other house opened fire, sparking a gunbattle that left one gunman dead, Esman said. A second man came out with an explosives belt — which the army believed was meant for an attack on Israel — and blew himself up, causing no injuries to the soldiers, Esman said.

Islamic Jihad identified the dead as Moutaz Khalil and Ali Abu Hazne from the village of Atil near Tulkarem. The army said their terrorist cell was responsible for an Oct. 26 suicide bombing in Hadera that killed five Israelis.

Islamic Jihad is responsible for all six suicide bomb attacks on Israelis since a cease-fire was declared last February. Israel has killed several Islamic Jihad terrorists and arrested others as part of a crackdown on the group.

The clash was the worst Israel-Palestinian violence since an Israeli airstrike Dec. 14 killed four terrorists from the small Popular Resistance Committees group in the Gaza Strip.