In the biggest demolition in the West Bank in years, Israel razed 62 shops and market stalls in a Palestinian village Tuesday, as occupation troops clashed with protesters, residents said. Israel says the shops were built illegally. The mayor of the village accused Israel of waging war on the Palestinian economy. Seven bulldozers, guarded by some 300 occupation troops, began tearing down shops in the village of Nazlat Issa early Tuesday. By midmorning, 62 shops were demolished, the mayor said.

Dozens of protesters threw stones at occupation troops who fired tear gas and rubber-coated steel pellets. Other demonstrators chanted "Down with the occupation."

The village is on the edge of the West Bank, close to Israel. The 170-shop market in Nazlat Issa drew many Israeli customers before the outbreak of fighting in September 2000. The market is a main source of income for the village's 2,500 residents, said the mayor, Ziad Salem, adding that Israel officials informed the shopowners that the entire market would be demolished.

Prime Minister Ariel Sharon  has taken a hardline against a Palestinian uprising in the West Bank and Gaza Strip , and Palestinian officials claim he is escalating his activities to garner right-wing support in the days ahead of a Jan. 28 general election.

Israeli occupation troops have demolished hundreds of Palestinian homes, many in the Gaza Strip, in the past 28 months of fighting. In Gaza alone, more than 5,700 Palestinians have been made homeless, according to Palestinian officials.

Many of the buildings were razed in military offensives, with Israel saying the structures provided cover for Palestinian resistance men.

Since July, Israel has also demolished dozens of homes of Palestinians involved in bombing and shooting attacks on Israelis. Human rights groups say the demolitions constitute collective punishment, while Israel says they are an important deterrent.

In Nazlat Issa, demolition orders were distributed earlier this month, and shopowners were told they had 15 days to file court appeals. The mayor said the market has been operating for more than 10 years, and this was the first time merchants received demolition orders.

"The Israelis are waging a war on the economic front as well," Salem said.

Talia Somech, a spokeswoman for Israel's occupation army government in the West Bank, said it took 10 years to take down the shops because a series of court and committee hearings precede the demolition of illegal structures in the West Bank.

She said the owners had a chance to remove the inventory before the demolition.

Palestinian Cabinet minister Saeb Erekat called the demolitions "reflect the fait accompli policies of Sharon on the ground, knocking down homes, livelihoods."

In another demolition, in the West Bank town of Dura near Hebron, occupation troops early Tuesday leveled the house of a activist from the Al Aqsa Martyrs Brigade, a militia linked to Yasser Arafat 's Fatah movement. The occupation army said the militiaman was responsible for carrying out attacks on Israelis, including one in which a soldier was killed.

Israel has reoccupied every West Bank town and village, except Jericho, since the summer in response to dozens of resistance bombings and shootings that have killed hundreds of Israelis.

Arafat blamed the occupation army's presence for the delay of Palestinian elections which were to have been held Monday. "They have to withdraw," he told CNN, dismissing Israeli claims that the restrictions are necessary to keep bombers out of the country.

The United States has demanded the Palestinians reform their government and hold elections, as a precondition to statehood.

Meanwhile, Egypt invited Palestinian factions to Cairo on Wednesday to continue talks on a proposal for a one-year halt on attacks against Israeli civilians. The proposal, which has Arafat's backing, has been rejected by the resistance Islamic Jihad group. Hamas has not made its position public.

Egypt hopes a cease-fire declaration would weaken Sharon's popularity and boost the election chances of dovish Israeli opposition leader Amram Mitzna ahead of the Israeli elections. Mitzna wants an immediate resumption of peace talks with the Palestinians.

PHOTO CAPTION

Palestinians looks at the body of Ammar Elaian, 26, as others pray at the Al Kabir mosque before Elaian's funeral in the Khan Younis refugee camp in the Southern Gaza strip  on Monday, Jan. 20, 2003. Elaian was seriously wounded in an exchange of fire with Israeli occupation troops on Saturday, Jan. 11, 2003 and later died of his wounds. (AP Photo/Khalil Hamr