An unprecedented shake-up in the composition of the Palestinian Authority has been announced by chairman Yasser Arafat. However, the changes have been eclipsed by a shooting spree at the Israeli airline ticketing desk in Los Angeles in which three people were killed. The Israelis believe there was Palestinian involvement.
They say the assault by a lone gunman at Los Angeles Airport yesterday appeared to be a "terrorist attack" but US officials said they had no indication it was anything but an isolated incident. The Israeli foreign minister Mr Shimon Peres has conceded there is no evidence to suggest Palestinian militants or sympathisers were involved.
Mr Arafat - under intense US pressure for reform - reshuffled the hierarchy of his much-criticized security apparatus by formally dismissing his powerful West Bank security commander and the Palestinian police chief.
The moves appear unlikely to satisfy US President Mr George Bush, who has called for the Palestinian president himself to be replaced with leaders "uncompromised by terror."
Mr Jibril Rajoub, the powerful head of the Palestinian Preventive Service in the West Bank and once considered a potential successor to Mr Arafat was among the powerful figures dismissed in the Palestinian shake-up.
He was appointed governor of Jenin while the previous incumbent, Mr Zuhair Manasra, was made the new West Bank security commander.
Palestinian officials said Mr Arafat also ordered the replacement of police chief Mr Ghazi al-Jabali. A senior security source had said he resigned and would challenge Mr Arafat for the presidency in elections six months away.
But other Palestinian officials said Mr Jabali was trying to save face when it became clear he was being dismissed. He is thought to have little chance against Mr Arafat.
Meanwhile, violence flared in the Gaza Strip, where a car bomb killed two leading Palestinian militants in an attack described locally as an Israeli "assassination."
The two men killed were suspected members of the al Aqsa Martyrs Brigades, an offshoot of Arafat's Fatah movement.
The attack came as residents in four of seven West Bank cities emerged from their homes to stock up on supplies as the Israelis relaxed daytime curfews.
In the US, a gunman shot and killed two people and wounded three others before he was shot dead by El Al security agents at the Israeli airline's ticket counter in Los Angeles international airport.
The incident came amid heightened security around the United States as Americans, nervous after a string of government warnings about possible future acts of terror, celebrated their first Independence Day holiday since the September 11 attacks.
"Organizations, primarily Islamic extremist organizations, are planning to hit Israeli targets outside [Israel]. And an airport is a preferred target," Israel's Transport Minister Efraim Sneh told Israel's Army Radio.
But officials in the United States said the motive for the shooting was not immediately known and Los Angeles Mayor James Hahn said it was an "isolated" incident.