Israeli military chiefs and senior Palestinian police officials were holding crisis talks last night in Gaza after a Palestinian gunman shot and badly wounded an Israeli soldier in the worst incident of another long day's violence.
Several Palestinians were also hurt in yesterday's protests, as Palestinians marked the first of two "days of rage" to demand the release of prisoners from Israeli jails. More violence now seems likely today.
The Gaza shooting took place near the Netzarim settlement. TV cameras caught on film the moment when an Israeli soldier, his bloodied body falling backward out of the back of a jeep, was driven away from a clash in which both sides had exchanged gunfire.
The shootings followed a demonstration in which hundreds of Palestinians had been throwing stones and petrol bombs at Israeli troops, who responded with teargas and rubber bullets, while Israeli helicopters sprayed tear-gas from above.
In several major cities in the West Bank, Palestinian protesters threw stones and petrol bombs at soldiers, and the Israelis responded with rubber bullets and tear-gas. The Palestinians reported dozens of injuries.
At the height of Monday's clashes, in which three Palestinians were killed, Israel moved tanks into forward positions and threatened to open fire from helicopter gunships.
Yesterday's renewed violence came despite a demand from Israel's Prime Minister, Mr Ehud Barak, that the Palestinians "take all necessary steps" to prevent further violent protests. He suggested that the Palestinian Authority President, Mr Yasser Arafat, is losing control of what were intended to be forceful, but not bloody, protests against the non-release of more than 1,600 Palestinian prisoners from Israeli jails. Israel's military commanders are now talking openly about the "worst-case scenario" plans that they have drawn up, to move forces into Palestinian-held areas of the West Bank and Gaza if necessary to confront Palestinian gunmen.
This week's clashes have destroyed much of the fragile goodwill built up between Mr Barak and Mr Arafat in the year since Mr Barak's election victory. Mr Barak is refusing to transfer control of three villages adjoining Jerusalem to Mr Arafat, or to contemplate the further prisoner releases the Palestinians are demanding, until he receives an explanation from Mr Arafat for Monday's various gun battles, all of which were initiated, the Israelis insist, by the Palestinians.
Mr Arafat and his officials are fuming that Israel was preparing to escalate the confrontation by using its helicopter gunships and targeting Palestinian command offices. Mr Barak, who has marked the anniversary of his May 17th election victory well aware of public disappointment with his lack of peacemaking and domestic achievement, is also grappling with increasing tension on the northern border with Lebanon.
Three Israeli soldiers were injured there on Thursday, and residents of northern Israel are being forced intermittently into bomb shelters, as Hizbullah gunmen intensify attacks ahead of Israel's scheduled July 7th withdrawal from its south Lebanon "security zone".
Aides to the prime minister now say that the withdrawal may take place several weeks ahead of schedule and heavy equipment is being pulled out daily. Though the UN is involved in the preparations for the withdrawal, there is no guarantee that it will be able to ensure cross-border peace.
Israel is starting to drop public hints that it might resort to the high stakes policy of targeting Syrian troops in Lebanon after a pullout, as a means of pressuring the Syrians to rein in Hizbullah.
Exacerbating Mr Barak's troubles is the growing instability of his ruling coalition. One party is bolting because of what it deems his overly generous policies toward the Palestinians, and others are contemplating defections to the opposition.