Israeli soldiers killed a Palestinian bystander Thursday, witnesses said, a day after Israel announced it would ease West Bank blockades to boost Palestinian Prime Minister Ahmed Qurie. Emtiaz Abu Ras, 38, was shot as she peered from a window of her house at troops who pursued and opened fire at a Palestinian in an alley in the West Bank city of Nablus, witnesses said. An Israeli military source said soldiers carrying out an operation against "terrorist infrastructure" in the area ran into heavy gunfire from numerous locations and shot back but did not see if anyone was hit. The Israeli army said Wednesday its armored forces would reduce their presence in and around West Bank cities except for Nablus and Jenin. But there was no intention to remove a network of checkpoints and roadblocks. Meanwhile, the Palestinian president and Qurie are still divided over the appointment of an interior minister and delegation of security powers key to any efforts to end three years of intifadha and revive a stalled U.S.-backed "road map" to peace. Despite the army's announcement, Palestinians reported no easing of edicts that have largely trapped them in their towns and crippled their economy. Israel says the measures are needed to stop bomb attacks reaching its cities. Security sources said Defense Minister Shaul Mofaz had also decided in principle to remove 10-20 Jewish settlement outposts on occupied West Bank land. "The point of these steps is both to help Qurie consolidate his position vis-a-vis Arafat and the militants and satisfy the Americans who have been very critical of outposts," a senior Israeli security source said. Arafat converted Qurie's eight-member "emergency" cabinet into a caretaker government Tuesday, hours before its 30-day term expired, allowing more time to resolve the dispute. **PHOTO CAPTION*** A Palestinian child from the West Bank village of Masha plays with his bicycle next to a newly erected concrete part of the controversial Israeli security wall. (AFP/Yoav Lemmer)