Israel killed the military chief of the Palestinian militant group Islamic Jihad in a Gaza City airstrike yesterday that drew vows of revenge and could complicate efforts to end a huge Israeli offensive.

Bashir ad-Dabbash, 38, was the leader in Palestinian territories of the group sworn to destroying the Jewish state and at the forefront of a suicide bombing campaign during a four-year-old Palestinian uprising.

The killing of the Islamic Jihad leader came as Israeli PM Ariel Sharon tries to break armed factions before a planned withdrawal of troops and settlers from occupied Gaza next year. Militants seek to claim any pullout as a victory. Dabbash headed Jihad's military wing, known as the al-Quds Brigade. Political leader Ramadan Shallah is abroad - his predecessor, Fathi Shqaqi was shot dead in Malta in 1995.

It also sent tension soaring just as Israeli and Palestinian officials were trying to work out a deal on ending a six-day-old Israeli offensive into the Gaza Strip to end rocket fire by Palestinian militants.

Israel launched the offensive after a Hamas rocket strike killed two Israeli toddlers on Wednesday.

An Israeli army officer said yesterday Israel had arrested 13 UN employees in the Gaza Strip and planned to indict them for "suspected links to terrorism".

Hours after the air strike that killed the Islamic Jihad commander, an Israeli aircraft missile killed two Palestinian militants in the Gaza refugee camp of Jabalya.

Witnesses said the latest air strike, which also wounded two unidentified Palestinians, targeted members of the al-Aqsa Martyrs Brigades, an armed wing in Palestinian President Yasser Arafat's Fatah movement.