HIGHLIGHTS: Palestinian Shot Dead after Stabbing a Settler Near Nablus||Two Settlers Shot Dead South of Nablus||Palestinian Factions Urge Arab States to Punish U.S. Economy, Military||

A Palestinian bomber wounded four other people when he blew himself up in downtown Jerusalem, in the first such attack in Jerusalem in nearly six weeks, police said.

"There was an explosion in the centre and as a result of it the bomber died in the place. There are four others injured, lightly to moderately," Jerusalem police chief Micky Levy told Israel public television.

The explosion occurred in an area of central Jerusalem close to the boundary with occupied east Jerusalem, in front of a falafel stand near the Russian Compound, the site of several bars but also a prison.

The bomb went off about 400 meters (yards) from the prison housing Israel's most prominent prisoner, Marwan Barghuti, the West Bank secretary general of Yasser Arafat's Fatah movement facing trial on terrorism charges.

PALESTINIAN SHOT DEAD AFTER STABBING SETTLER

Israeli occupation troops meanwhile shot and killed an armed Palestinian who broke into a Jewish settlement near the West Bank town of Nablus and stabbed one of the settlers.

The Palestinian armed with two knives entered the internationally illegal Itamar (settlement) south of Nablus and broke into a house. He fought with and stabbed a man, moderately to severely injuring him.

Israeli medical and settler sources said the settlers wife had also been injured by the attacker after being stabbed in the neck, but she was said to be only lightly injured.

Separately, Israeli occupation army radio said that security forces had arrested a suspected Palestinian activist overnight in a mainly Arab Israeli village northeast of Tel Aviv.

The settlement incident marked the third time in two months that a Palestinian has managed to enter Itamar, which lies some five kilometers (three miles) south of Nablus, close to the Balata refugee camp.

On June 21, a Palestinian militant armed with a gun forced his way into the settlement and killed 5 settlers

He was shot dead by Israeli occupation troops.

That attack on the settlement, which is only partially fenced off, was claimed by the Popular Front for the Liberation of Palestine (PFLP).

Three weeks earlier, on May 28, another Palestinian militant infiltrated the settlement and shot dead three teenagers from an Orthodox Jewish institute before being shot dead by the settlement's security guard.

The attack was claimed by the Al Aqsa Martyrs' Brigades.

TWO SETTLERS SHOT DEAD IN WEST BANK

Two Jewish settlers were shot dead by Palestinian Resistance men near the northern West Bank city of Nablus.

The settlers from Kfar Tappuah were shot dead in the area of Jamayin, a Palestinian village in a zone under Israeli security control around 10 kilometres (six miles) south of Nablus

The occupation army immediately imposed a curfew on the village, which is under Palestinian administrative control.

PALESTINIAN FACTIONS URGE ARABS PUNISH U.S. ECONOMY, MILITARY

Palestinian factions from across the political spectrum joined forces in urging Arab states to use their economic leverage against the United States and remove its military bases from their soil.

Arab governments should "put pressure on US commercial and oil interests and throw out their troops in protest at US policy towards Israeli assaults against the Palestinian people", said a statement issued by 13 factions, including Yasser Arafat's mainstream Fatah movement as well as hardline groups.

In a separate statement issued from its base in Damascus, the Democratic Front for the Liberation of Palestine said the United States was now the "real criminal" in the region.

PHOTO CAPTION

An armored Israeli bulldozer triggers an explosion while driving near a body, allegedly that of a Palestinian man, seen on the left in blue, in Beit Lahia, northern Gaza strip, Monday, July 29, 2002 during a standoff between Palestinians and Israeli forces. Palestinians gathered near the Netzanit Jewish settlement to retrieve the man killed by Israeli forces Sunday night while trying to approach the settlement. (AP Photo/Hatem