HIGHLIGHTS: Al-Aqsa Brigades Claims Responsibility for Killing an Israeli Settler & Wounding Another Near Qalqilya||Condemning Israel for the Gaza Massacre, UN Security Council Prepares to Take a decision||Arafat to Appoint Prime Minister||Mubarak set to Discuss Middle East with Chirac|| STORY: Suspected Palestinian Palestinian resistance men shot and killed an Israeli motorist early Thursday as Israel's foreign minister warned that civilians would likely "pay dearly" for the airstrike that killed a top Palestinian Resistance leader and 14 others.

The motorist, a rabbi, was killed and another person seriously injured after gunmen opened fire on their car near the Jewish settlement of Elei Zahav, south of the Palestinian town of Qalqilya in the West Bank.

The military wing of Fatah organization, the Al Aqsa Martyrs brigade, claimed responsibility for the attack saying it was in revenge for Israel's airstrike on the Gaza Strip.

The gunfire, coming from the nearby Palestinian village of Burkin, continued after occupation troops arrived and only stopped after Israeli tanks arrived and returned fire.

Occupation army officials, speaking on condition of anonymity, said tracks from the scene led to Burkin and that troops were questioning residents.

The shooting came as Israelis braced for promised retaliation from the Resistance group Hamas following the bombing early Tuesday in Gaza City that killed Hamas military leader Salah Shehadeh and 14 others, including nine children.

OCCUPATION ARMY ARRESTS HIEAD OF FATAH MOVEMENT IN QALQILYA

Palestinian sources reported that the Israeli occupation army has arrested a number of Palestinians in the Qalqilya area Thursday morning. Among those arrested is Mahmoud Aza.

Aza is the head of the Fatah movement in the Qalqilya area, four other Fatah members were also arrested.

UN SECURITY COUNCIL CONDEMNS ISRAEL AND IS ABOUT TO TAKE A DECISION

The U.N. Security Council, meanwhile, met to consider condemning Israel for the bombing, just the latest in a string of denunciations from the United States, Europe and the Arab world.

World critics rejected Israel's explanation that it was aiming only for Shehadeh, charging that Israel's policy of killing terror suspects is a violation of international law. The most scathing statements, however, centered on the fact that so many bystanders were killed and wounded.

More than 100 people were injured in the strike, most of them in adjoining structures damaged by the bomb, reported by Israeli media to weigh a ton.

Countering the wave of international criticism, Israel on Wednesday sent Peres, its best-known peace advocate, on a tour of the offices of foreign news media in Jerusalem, where he said, over and over, that the bombing was a mistake.

Peres said that as goodwill gestures, Israel would release some of the funds it has been keeping from the Palestinian Authority and would allow 4,000 Palestinian workers to enter Israel. Also, he said, curfews in West Bank cities and towns would be lifted for longer periods.

However, the gestures did not mollify the Palestinians, who called the Tuesday bombing a massacre and have been demanding much wider Israeli measures to ease restrictions in the West Bank.

ARAFAT TO APPOINT PRIME MINISTER

In another development, Palestinian Planning Minister Nabil Shaath said that even if Arafat appoints a prime minister after a Palestinian state is created, it would not "limit the authorities" of Arafat.

Shaath, a close confidante of Arafat, said last week that Arafat might appoint a prime minister in the future, an idea seen as a response to U.S. and Israeli demands that Arafat remove himself from power. But Shaath said Wednesday in Riyadh, Saudi Arabia, "We are not going to conspire against (Arafat) ... just to satisfy the U.S or Israel."

MUBARAK SET TO DISCUSS MIDDLE EAST WITH CHIRAC

Egyptian President Hosni Mubarak was to meet French President Jacques Chirac in Paris later Thursday to discuss an Arab proposal that has emerged as the strongest recent attempt to calm the Middle East crisis.

The plan calls for Arab countries to have peaceful relations with Israel if the Jewish state withdraws from the Palestinian territories and a Palestinian state is declared within the next three years, as promised last month by US President George W. Bush.

But the heightened sense of alarm caused by Israel's Gaza air strike late Monday, has undercut any hope of a diplomatic breakthrough.

Mubarak, who arrived in Paris on Wednesday, is expected to announce the Arab world's condemnation and again reject Bush's call for Palestinian leader Yasser Arafat to be excluded from any future negotiations.

PHOTO CAPTION

An Israeli border police officer guards the main entrance to the Mahane Yehuda market in Jerusalem Thursday, July 25, 2002. Security is on high alert throughout Israel in anticipation of Palestinian Revenge attacks for the Gaza massacre on Tuesday. (AP Photo/Markus Schreiber)
- Jul 25 7:08 AM ET