Israeli settler killing hits ME truce hard

The attack, the second killing of a settler in four days, followed Israel's detention of 63 suspected Islamic Jihad militants in the West Bank and resumption of a policy of assassinating the group's leaders.

The ceasefire agreed in February has been fraying for weeks in Gaza, raising the spectre of disruption to Israel's planned pullout from the territory later this year.

Several other settlers were wounded when militants fired from a passing car at a hitch-hiking post near the West Bank city of Hebron and shortly afterwards at a vehicle near a settlement, the Israeli army said.

The militants fled the area in the southern West Bank and Israeli troops launched a search backed up by helicopter gunships, witnesses said.

There was no immediate claim of responsibility for the attack. On Monday, Islamic Jihad militants shot dead a settler in a drive-by attack in the northern West Bank.

The resurgence of violence marred a summit between Israeli Prime Minister Ariel Sharon and Palestinian President Mahmoud Abbas on Tuesday, and on Wednesday Israel reactivated its "targeted killing" policy against Islamic Jihad leaders.

Sharon's adviser, Raanan Gissin, told Reuters that, if Abbas did not act to stop gunmen, Israel would "take all the necessary steps to bring perpetrators to justice. We will pursue them."

The Israeli prime minister has accused Abbas of not living up to pledges to disarm militant groups, a precondition for US-backed "road map" peace talks aimed at giving the Palestinians a state in the Israeli-occupied West Bank and Gaza.

The Palestinian leader said Israel's slowness to ease burdens of occupation, such as closed borders and roadblocks, left him little leverage to crack down on gunmen.

If the truce unravels, Israel's planned August evacuation of 21 settlements in Gaza and four of 120 in the West Bank could come into question, as Sharon has vowed no "retreat under fire."

Militants say Israel has provoked them by continuing raids for wanted comrades. Israel say militants have resumed shooting to force Abbas to share power with them and torpedo peacemaking.

On Friday, the official Palestinian news agency Wafa said Abbas intended to create a special security force to fill a potential power vacuum after the Israeli pullout.

"President Abbas has ordered the formation of a new special force to be trained and equipped to assume responsibility for protecting the areas Israel will vacate," Wafa said.

It condemned Israel's revival of its assassination policy as counterproductive to truce understandings but added: "(Militant) factions are called upon to show restraint."