Palestinians said the fighting broke out before dawn Monday after soldiers and
Jewish settlers attacked Muslim worshippers.
The Israeli army said Palestinian gunmen attacked the shrine, revered by Jews as Rachel's Tomb, the burial site of the biblical matriarch, from three sides and apparently tried to take it over.
The confrontation lasted hours; twelve Palestinians were reportedly injured, and at one point during the battle, Israeli helicopters aiming at Palestinian gunmen fired two rockets at the Aida refugee camp near Bethlehem, the army said.
The Israeli army said it was one of the most intense gun battles in more than nine weeks of fighting. The sustained unrest has claimed nearly 300 lives, most of them Palestinian.
The battle prompted Palestinian leader Yasser Arafat to say that Israel
violated an agreement to "cool down the situation."
The Palestinian leader carried a holstered German-made machine pistol in his left hand the first time he was seen with a gun in public since he returned to the Palestinian
areas in 1994. Arafat said he was carrying the weapon because Jewish settlers blocked Gaza's main north-south thoroughfare, the road he had to travel to reach Gaza City.
Meanwhile, Awad Silmi, 28, a member of the radical Islamic
movement Hamas, apparently blew himself up with a bomb and was
found dead by Palestinian security forces in Gaza near the Jewish
settlement of Netzarim, Hamas said.
Silmi was suspected of killing an Israeli soldier in Gaza, and
had been jailed by the Palestinian Authority for four years before
being released recently, Hamas said.
Israel Agrees to Int'l Probe
There had been a relative downturn in the number of shooting
incidents in recent days. But the firefight and renewed shooting
Sunday night on the Jerusalem neighborhood of Gilo, built on land
Israel captured in the 1967 Mideast war, underscored simmering
tensions.
In a related development, top Barak aide and senior Israeli
negotiator Gilead Sher said Sunday that Israel would cooperate
fully with an international inquiry into the causes of the
violence.
Israel has previously said that the fact-finding commission,
agreed to at a Mideast summit in October, should not begin its work
while violence was continuing and other parts of the summit
agreement had not been implemented.
Speculation Over Netanyahu's Return
Amid the fighting, Israelis have begun to turn their attention
to early elections, expected to be held this spring.
After only 18 months in office Prime Minister Ehud Barak is
hinging his hopes for re-election on a last-ditch bid to clinch a
peace deal partial or comprehensive with the Palestinians.
Barak is being squeezed on all sides. He faces early elections
he had hoped to avoid, growing public dismay over his failure to
halt the violence, and a potential revolt from within his own
party.
Barak also faces the possible return of his hard-line
predecessor Benjamin Netanyahu, who returned home from the
United States amid feverish speculation he is planning to run again
for prime minister.
Netanyahu touched down at Ben-Gurion airport near Tel Aviv after a lengthy trip to the United States and was immediately mobbed by journalists asking if he would run for
prime minister. He refused to give a clear answer.
Netanyahu retreated from public view after being trounced by
Barak in an election 18 months ago. He has spent much of his time
in the United States. His three years in office, from 1996-99, were
marked by constant friction with the Palestinians and sporadic
outbursts of violence.
But the current Palestinian uprising has left many Israelis
disillusioned with Barak and his handling of the peace process.
Netanyahu currently holds a double-digit lead over Barak, according
to opinion polls.
Barak won a four-year term in 1999, but his allies in parliament
deserted him in July, peace negotiations with the Palestinians
stalled, and the violence erupted at the end of September.