UN Secretary-General Kofi Annan reported that Israel has failed to comply with a General Assembly demand that it halt construction of a barrier cutting deep into Palestinian West Bank lands. The official finding lays the groundwork for the Palestinians to return to the 191-nation assembly to seek further action against Israel, probably next week. "I have concluded that Israel is not in compliance with the assembly's demand that it 'stop and reverse the construction of the wall in the Occupied Palestinian Territory,'" said the report, requested by the assembly in an October 21 resolution. Annan acknowledged Israel's "right and duty to protect its people against terrorist attacks." But doing so by building what Israel calls a "security fence" that veers as much as 22km from its 1967 border with the West Bank would violate international law and increase Palestinian suffering, he said. It also "could damage the longer-term prospects for peace by making the creation of an independent, viable and contiguous Palestinian state more difficult," his report concluded. The Israeli army shot and killed a Palestinian policeman near a Jewish settlement in the Gaza Strip, Palestinian witnesses and medics said. They said soldiers shot Sayed Abu Safra, 35, in the head as he tried to keep a mentally retarded villager back from the perimeter fence around the Nissanit settlement on Gaza's northern boundary with Israel. **PHOTO CAPTION*** Unidentified relatives read verses of the Quran over the body of Palestinian intelligence officer Said Abu Safra, at Shifa hospital in Gaza city, Friday, Nov. 28, 2003. (AP Photo/Adel Hana)