Israeli troops, Palestinian gunmen clash in Jenin

Israeli soldiers exchanged fire with Palestinian gunmen and demolished the family home of a Hamas suicide bomber yesterday during a house-by-house sweep for militants in a West Bank city.

A 12-year-old boy standing at the gate to his home and a man inside his house were wounded in the shooting in Jenin, on the second day of the Israeli operation, witnesses said. Three soldiers were also wounded, Israeli military sources said.

Israeli Defence Minister Shaul Mofaz, rebuffing a call this week by Palestinian President Yasser Arafat for a ceasefire, pledged to maintain pressure on militant groups whose suicide bombings and shootings have killed hundreds of Israelis during a three-year-old Palestinian uprising for statehood.

A senior Israeli government source said Prime Minister Ariel Sharon would send a high-ranking delegation to Washington next week to try to reach a compromise over the route of a security barrier Israel is building inside occupied West Bank territory.

The United States has said it is considering how much of a $9 billion loan guarantee package it will deduct in response to Jewish settlement-building in the West Bank and that the controversial barrier could be an issue.

Israel says the barrier, a mix of fences and walls, is to keep suicide bombers out of its cities. Palestinians call it a "new Berlin Wall" expropriating farmland and in effect annexing terrain they seek for a state under a US-backed peace plan.

The senior source said two options were on the table - extending the barrier well into the West Bank to include settlements with 30,000 Jews, an option demanded by rightist ministers, or separate fences enclosing individual settlements.

US officials want the barrier built as close as possible to the "Green Line" boundary between Israel and the West Bank, and not looped eastward to include Ariel, a major settlement 20 kilometres inside the territory.

The senior source said Sharon told a meeting of ministers in his Likud party yesterday that a decision on the barrier route "must weigh the strategic, political and economic implications", but did not say which alternative he preferred. "After the delegation returns, the alternatives will be presented to the security and foreign affairs cabinet for a final decision," the source said.

The US-engineered "road map" peace plan, now stymied by resurgent violence, requires Israel to freeze settlement activity in the West Bank and Gaza Strip to help pave the way for a Palestinian state by 2005.

Mofaz told Israel Radio that Arafat's choice for prime minister, Ahmed Qurie, could prove himself a peace partner only by cracking down on those organisations once he takes office with his cabinet, expected to happen next week.

"As long as Arafat continues to be the Palestinian leader, I don't think there's a chance to move forward in the peace process," Mofaz said.

President George W. Bush said on Thursday a US-backed Middle East peace plan, known as the road map, had stalled and he blamed what he called Arafat's failed leadership.

Palestinian Labour Minister Ghassan el-Khatib said Bush's comments were "not constructive".

Palestinians say the road map was undermined by Israel's continued raids to kill or capture militants even after they declared a ceasefire in June. They cancelled it a month ago.

In recent weeks, 38 people have been killed in three Hamas suicide bombings in Israel and 28 Palestinians including nine civilians have been killed in Israeli air or ground operations.