Israel incursions to continue

Both sides blame each other for escalating violence

Israel has vowed to keep launching large-scale military incursions into Palestinian territory until it finds Palestinian rocket factories.

Five Palestinians were killed after Israeli tanks raided three towns and a refugee camp in the Gaza Strip on Wednesday in what Israel said was an act of retaliation for Palestinian rocket attacks.

The United States must put an end to this Israeli policy

Nabil Abu Rdeneh - Arafat adviser

They withdrew from two of the towns and the camp after a few hours, and are now reported to be leaving the third, Beit Hanoun, after arresting several alleged militants.

Israeli Cabinet Minister Ephraim Sneh said soldiers would remain in Palestinian-controlled areas until the rocket factories were found.

New weapon

If rocket attacks persisted, he said, Israel would launch bigger raids - although the Israelis have faced increasing international criticism over the severity of their retaliation.

Prisoners were taken back to Israel

"This is a threat we cannot tolerate," Mr Sneh told Israel Army radio.

Israel accuses Hamas militants of firing of a new kind of rocket - the Qassam-2 - from northern Gaza into Israel on Sunday.

But Palestinian officials accused Israel of intensifying the conflict.

They said each of Prime Minister Ariel Sharon's four visits to Washington since he came to power had been followed by an escalation in the fighting. Mr Sharon held talks with President George W Bush in Washington last week.

We will recognise a Palestinian state, they will recognise the state of Israel

Shimon Peres

Palestinian public security chief Abdel-Razek al-Majaydeh said: "We say to the Israeli leaders you will not be able to achieve security and peace by tanks and helicopters."

Peace plan rejection

On Tuesday, Mr Sharon and Defence Minister Benjamin Ben-Eliezer dismissed a peace plan drawn up by Foreign Minister Shimon Peres, and a top Palestinian official, Ahmed Qorei.

The plan called for a Palestinian state within a year.

Israel is accused of escalating the conflict

Mr Peres said that at first, the state would include territory already under full or partial control of the Palestinian Authority - about two-thirds of the Gaza Strip and 40% of the West Bank.

The plan has not yet been approved by the Labor Party, but Mr Peres says he is confident his party will back him.

Under the agreement, Palestinian militant groups such as Hamas and Islamic Jihad, which reject any peace deal with Israel, would be disbanded.

The UN Secretary General, Kofi Annan, has urged all sides to return to the negotiating table to break the cycle of violence.