Israeli occupation forces killed eight Palestinians, at least five of them armed, and an Israeli occupation soldier was shot dead Sunday as an occupation army offensive against Islamic activism strongholds in the Gaza Strip pushed on. On the political front, Israel's center-left Labor Party said it was pulling out of talks to join Ariel Sharon's governing coalition after the prime minister signed a coalition deal with the pro-settlement National Religious Party (NRP).

The decision dashed Sharon's hopes of forming a unity government to try to provide much-needed economic stability to Israel, which has been rocked by a 29-month-old Palestinian uprising for statehood.

Israeli armored columns backed by helicopter gunships rumbled into the northern Gaza Strip town of Beit Hanoun shortly after midnight Sunday, battling resistance men , destroying the homes of six Islamic activists and tearing up roads.

Palestinian sources said six Palestinians were killed in Beit Hanoun, including four resistance men and members of the Palestinian security occupation forces and one stonethrower.

A seventh Palestinian, armed with an AK-47 assault rifle and hand grenades, was killed during an attempt to infiltrate the Jewish settlement of Netzarim in central Gaza, the occupation army said.

In Khan Younis refugee camp to the south, a Palestinian resistance man shot dead a soldier at a nearby base, the occupation army said.

Occupation troops later killed a 15-year-old in a Khan Younis playground, Palestinian medical officials and witnesses said. Military sources said occupation troops fired after being shot at.

The deaths raised to 42 the number of Palestinians killed this week, most in Israeli military raids into Gaza prompted by cross-border rocket attacks by the Islamic resistance group Hamas.

Sunday, two "Qassam" rockets were fired from northern Gaza, shrieking over Beit Hanoun toward the Israeli town of Sderot.

A police spokesman said at least one rocket struck inside the town, causing no casualties.

Hamas has stepped up launches of its makeshift rockets at Israeli targets over the week.

"We hold Israel fully responsible for this escalation," senior Palestinian negotiator Saeb Erekat told Reuters.

At least 1,869 Palestinians and 706 Israelis have been killed since the uprising began in September 2000 after peace talks stalled.

LABOR PARTY TURNS ITS BACK ON SHARON

The Labor Party said Sunday it had found no common ground with Sharon over peacemaking with the Palestinians and saw no reason to pursue negotiations to join the governing coalition Sharon is trying to form after winning a January 28 general election.

"The contacts are over," said On Levy, a spokesman for Labor chairman Amram Mitzna.

Sharon's right-wing Likud party was due to hold more coalition talks with the centrist Shinui party.

Partnership with the NRP and Shinui would give Sharon control of 61 seats in the 120-member parliament.

In Beit Hanoun, occupation soldiers carried out house-to-house searches and arrested several suspected activists, the occupation army said. Bulldozers also piled up sand and asphalt at the town entrance to block off traffic, according to Palestinian witnesses.

Residents said occupation troops blew up houses belonging to five Hamas activists and one Islamic Jihad member. The occupation army said it was a message to activists that their "deeds have a price."

Occupation troops detained a Palestinian cameraman filming the scene for Reuters, drawing a written protest from an international media organization demanding his immediate release.

The occupation army said it suspected the journalist, Ahmed al-Khatib, 34, was involved in "terrorist activities." Occupation soldiers led him away after inspecting his identity papers.

The occupation army launched its current offensive against activists in the Gaza Strip and the West Bank city of Nablus after Hamas killed four tank crewmen in a bomb attack earlier this month.

Despite the violence, Palestinian leaders called for resistance groups to honor a one-year cease-fire as part of Egyptian-brokered negotiations between Palestinian nationalist and Islamic resistance groups which have so far borne little fruit.

Mahmoud Abbas, secretary-general of the PLO's Executive Committee, wrote in the Palestinian newspaper Al-Ayyam that he expected the Cairo talks to resume, possibly next week.

PHOTO CAPTION

Palestinian children examine debris after the Israeli occupation army demolished their house in Beit Hanoun in the northern Gaza Strip February 23, 2003. Columns of Israeli armor backed by helicopter gunships rumbled into the northern Gaza Strip town shortly after midnight, engaging in fierce battles with resistance men destroying the homes of three Islamic activists and killing four persons. (Jose Manuel Ribeiro/Reuter