US: Mid-East getting out of control

Observers say Israel is targeting Palestinian activists

The United States has criticised both Israel and the Palestinians for the escalating violence, as a second night of fighting broke out at the Khan Yunis refugee camp in the Gaza Strip.

The violence was producing "a new cycle of action or reaction which can become impossible to control," said State Department spokesman Richard Boucher.

While shooting is going on, violence is going on, it is very difficult to discuss peace

Zalman Shoval, Israeli aide

At Khan Yunis on Tuesday night, 60 Palestinians were wounded, said Palestinian officials.

The fighting flared after Israeli forces killed one of Palestinian leader Yasser Arafat's bodyguards, by blowing up his car from a helicopter.

Palestinian officials condemned the killing as a "war crime".

"Our assessment is the events of the last 48 hours represent a serious deterioration of the security situation on the ground at a time that we all recognize is very, very sensitive," said Mr Boucher.

He said the US condemned both Israel's use of helicopter gunships, as well as Palestinian attacks on settlements and motorists and the use of mortars.

'No talks'

The latest clashes came as three senior aides of Israel's Prime Minister-elect Ariel Sharon met US officials in Washington.

Ariel Sharon has ruled out talks until the violence ends

The Israeli delegation said there would be no negotiations with the Palestinians while the violence continued.

"The prime minister-elect of Israel, Sharon, is determined to pursue the track of peace ... provided the other side understands that while shooting is going on ... it is very difficult to discuss peace," former Israeli ambassador Zalman Shoval told reporters outside the White House.

Earlier, Israel defended the killing of Yasser Arafat's bodyguard, Massoud Ayad, saying he was targeted because of alleged links with the militant Islamic group Hezbollah, and alleged involvement in attacks on Jewish settlers.

In a separate incident Bilal Ramadan, a 14-year-old Palestinian boy, was shot dead on his way home from school. Palestinian witnesses said he was shot by Israeli soldiers near an army outpost in Gaza, but Israel has denied this.

'War crime'

Observers say the attack on Mr Ayad signifies a return to an earlier Israeli tactic of directly targeting Palestinian activists.

The Palestinian National Authority strongly condemns this ugly crime

Palestinian Ministry of Information

Mr Ayad died when his car was hit by missiles fired from two Israeli helicopter gunships near a refugee camp on the outskirts of Gaza.

Israel says Mr Ayad was behind a series of attacks on the Jewish settlement at Netzarim and was plotting a kidnapping - but Palestinian officials deny this is the case.

Palestinian Justice Minister, Freih Abu Medein described Israel as "a state above the law," and said the killing amounted to a war crime.

Clashes followed the shooting of Bilal Ramadan

Following the attack, hundreds of Palestinians gathered around Mr Ayad's burnt out car shouting "death to Israel".

The BBC's Jeremy Cooke says the conflict seems to be moving away from stone-throwing on the streets to prolonged exchanges of gunfire.

Some analysts believe the upsurge in Palestinian protests may be designed to test the resolve of Israel's new prime minister, Ariel Sharon, who is finalising the formation of a national unity government.

The coalition, which will probably include outgoing Prime Minister Ehud Barak and his Labour Party, seems likely to concentrate on seeking only a partial peace deal.