Tensions flared on the Israeli-Lebanese border after a blast wounded two Israeli occupation soldiers, while a Palestinian woman was shot dead and three of her children hit by gunfire in the Gaza Strip. Palestinian factions also appeared set to restart talks on a truce in their 26-month-old uprising ahead of Israeli elections next month that are expected hand hardline Prime Minister Ariel Sharon a landslide victory.

The Israeli occupation army said one of its patrols on the border with its northern neighbour was hit by a roadside explosion.

The attack near the Israeli village of Zarit was claimed by a previously unknown group in a phone call to AFP in Beirut.

It was the first such incident in the western sector of the border since Israeli occupation troops withdrew from southern Lebanon in May 2000.

The head of Israel's northern command, General Benny Ganz, called the attack "very serious" and fingered the Lebanese resistance group Hezbollah.

Defence Minister Shaul Mofaz later met with senior occupation army officials to discuss possible retaliation.

Late Sunday, another two Israeli occupation soldiers were injured when a blast rocked their jeep and they came under gunfire near the West Bank town of Tulkarem in an attack claimed by the Palestinian Jihad resistance group.

In the southern Gaza Strip, Nahla Aqel, 41, was killed by automatic weapons fire in a street while on her way to neighbours for an Eid al-Fitr holiday meal near the Jewish settlement of Rafah Yam, Palestinian medical sources said.

Her daughter, and two sons were wounded in the shooting in an impoverished area near the Egyptian border, the sources said.

They said Israeli occupation troops posted at the settlement had told the family to go home, and then fired in their direction.

An Israeli occupation army source said occupation troops had identified a group of armed Palestinians in a closed military area near the Rafah settlement.

The Palestinian leadership reacted in anger, slamming the death as another example of Israel's "state terrorism."

Meanwhile, with celebrations for the Eid al-Fitr holiday marking the end of the Muslim holy month of Ramadan coming to a close the Palestinians were preparing to restart truce talks.

The discussions between Hamas and Fatah were expected to resume "as soon as possible", international cooperation and planning minister Nabil Shaath said.

"We are planning to have a meeting with Hamas in Gaza as soon as possible and talks in Cairo will take place next week at the latest," he said.

He stressed the discussions would attempt to secure a commitment by the powerful Islamist movement for an end to attacks against civilians, including "armed settlers", and for the creation of "an independent Palestinian state with Jerusalem as its capital within the 1967 borders only."

Hamas officially rejects the very existence of the state of Israel, and has repeatedly said Jewish settlers are "legitimate targets", while Palestinian leader Yasser Arafat's Fatah group has generally stopped short of condemning attacks on settlers.

But an armed Fatah off-shoot, the Al-Aqsa Martyrs Brigades, later rejected any truce or end to the uprising.

An Israeli occupation army spokesman said a curfew was lifted in most reoccupied West Bank cities, except Bethlehem, invaded following the latest resistance bomb attack in Jerusalem two weeks ago and declared a closed military area.

The occupation army's clampdown on Bethlehem, the town where Jesus Christ is believed to have been born, was expected to feature in a meeting Wednesday between between Israeli President Moshe Katsav and Pope John Paul II at the Vatican.

Katsav flew to Germany Sunday on the first leg of a four-day tour which will also take in Italy

PHOTO CAPTION

A Palestinian family looks out a window during curfew as Jewish settlers, not seen, march along the streets of the Old City of the West Bank town of Hebron Wednesday Dec. 4, 2002. (AP Photo/Zoom 77)