Violence erupts in Gaza

Palestinians in Hebron aims stones at Israeli soldiers during clashes on Wednesday

JERUSALEM (CNN) -- Israeli tanks fired shells in a Palestinian area in Gaza on Thursday as hopes dimmed for a US-backed ceasefire plan.

Five Israeli tanks fired shells and heavy machine-guns at the area, and blocked a main road to Palestinian traffic, before withdrawing an hour-and-a-half later and reopening the road, eyewitnesses told Associated Press news agency.

Israeli military officials said the tanks had travelled 200 metres into the Palestinian area and then left.

They said two mortars had earlier on Thursday hit a farm at the nearby Jewish settlement at Netzarim.

An Israeili soldier had also earlier been injured in a roadside bombing, AP reported.

The bomb went off as the soldier's vehicle drove by. No casualties were reported from the mortar firings.

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Elsewhere in the region, Palestinians in the West Bank opened fire on an army vehicle near Hebron. No casualties were reported in that incident.

The latest volley of tit-for-tat manoeuvres came a day after 38 Palestinians, including 15 children, were injured during three-and-a-half hours of gun battles at Rafah in the southern Gaza Strip, doctors told AP.

Also Wednesday, an 86-year-old Israeli man suffered a serious chest injury and an Israeli motorist was shot dead in a Palestinian ambush.

Both sides traded recriminations after the Rafah gun battle.

Three of the 38 injured in that violence were said to be in critical condition. Among them is a 14-year-old teenager struck in the neck by a bullet.

Palestinians told AP that shrapnel at one point smashed into the ground near a group of residents at the refugee camp, hurting 10.

Israel denies that any of its fire hit the camp.

In another gun battle, the AP reported, Palestinian gunmen fired at the Jewish neighbourhood of Gilo from the West Bank town of Beit Jalla.

Truce in the balance

On Wednesday, Israel insisted that a cease-fire remains in place.

But the fate of a truce plan drawn up by an international commission headed by former U.S. Senator George Mitchell hung in the balance after Palestinians characterised Israel's reaction to plan as a "manoeuvre" that failed to address the thorny issue of Jewish settlements they view as illegal.

Israeli Prime Minister Ariel Sharon and Palestinian Authority President Yasser Arafat got calls Wednesday from U.S. President George W. Bush urging them both to bring a halt to the violence and implement the recommendations made by the Mitchell committee.

White House press secretary Ari Fleischer told reporters that Bush's message in the calls was that the Mitchell committee report "gives all parties an opportunity to seize the opportunity to emerge from the violence, to end the violence."

Fleischer said the United States is prepared to do its part to help but first there needs to be evidence of a "willingness by the parties themselves to end the violence."

U.S. officials said both leaders agreed the Mitchell report could serve as a framework for trying to end the violence, but U.S. officials said the true test would be whether they were willing to take steps to bring about a cease-fire.

Tuesday evening, Israeli declared a unilateral cease-fire and ordered its troops not to fire except in life-threatening situations.

Palestinians dismissed the move as a "manoeuvre" and rejected it.