Annan, Powell criticize Israelis, Palestinians

Hamas militants carry mock missiles during a mock funeral.

JERUSALEM (CNN) -- U.N. Secretary-General Kofi Annan and U.S. Secretary of State Colin Powell both had sharp words for Israel and the Palestinians Wednesday, saying neither side was doing enough to stop the violence that has escalated in recent days.

The "situation has clearly got completely out of hand and the risks are great," Annan said.

Strikes at Palestinian locations continued Wednesday night. The targets included Palestinian leader Yasser Arafat's headquarters compound in Ramallah and other sites in Gaza and the West Bank.

Palestinian security sources said no one was injured when two missiles fired by Israeli helicopters hit a security office within the compound.

At the time of the strike, Arafat was meeting in his nearby office with European Union Middle East envoy Miguel Angel Moratinos.

Moratinos' spokesman, Javier Sancho, confirmed the missile exploded during the meeting.

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"We are not now making any comment. We need to gather more information, but we were there, yes," Sancho told The Associated Press from Moratinos' car on the way from Ramallah to Jerusalem.

Seven people were killed in the Gaza and West Bank strikes, Palestinian sources said.

Israel said the strikes were in response to a Palestinian Qassam missile attack Tuesday from the West Bank on a town in southern Israel that wounded a baby and his mother.

In separate incidents, the Israeli army confirmed two of its soldiers were killed overnight in Gaza.

According to the Jerusalem daily Ha'aretz, Palestinian officials said at least four Palestinian youths were wounded, two of them critically, by Israeli troops in a shooting incident Wednesday at a school in the West Bank.

An Israel Defense Forces spokeswoman said soldiers returned fire when a military jeep came under fire in Silat al-Baher. She said the report of the students wounded at the school was being checked.

The latest violent upsurge in the region began late last week when Israeli forces moved into Palestinian refugee camps in what Israel called an attempt to "dismantle the terrorist infrastructure."

Saeb Erakat, senior Palestinian spokesman, said the decisions of Israeli Prime Minister Ariel Sharon's government "are translated now into assassinations and to bombardments and to shellings and to F-16s and to missiles" and said the differences between the sides would never be solved militarily.

"The terror must stop now before any progress can be made," said Danny Ayalon, Israeli Foreign Ministry spokesman. "The Palestinians have unleashed a war of terror against Israel. They mainly [target] civilians, children, all families are being killed, defenseless people."

In his sharpest criticism to date, Annan said Israeli and Palestinian leaders have a responsibility to lead. He added, "History will judge them harshly and their people will not absolve them, if they fail."

Powell, appearing at a House hearing on the State Department budget in Washington, said Israelis and Palestinians both need to think through and review their policies.

Powell said Sharon "needs to take a hard look at his policies to see if they can work. .... I don't think that declaring war on the Palestinians will work."

With tension rising, Sharon canceled a trip scheduled next week to England and Spain, his office said.

Concern over Qassam missiles

Israel sees the use of the homemade Qassam missiles as a dangerous escalation because they have the range to reach Israeli population centers. (Qassam Fact Sheet)

Newspaper and radio reports last week said Arafat's Fatah movement was threatening to fire Qassam rockets into Israel if Israeli troops did not pull out of Palestinian refugee camps.

Israel said the camps were refuges for terrorist activities and that it was carrying out operations to protect Israel's security.

Reporting crews arrive at Arafat's Ramallah headquarters after an Israeli helicopter attack Wednesday.

Two of those killed in Wednesday's airstrikes -- Mohannad Abu Halawah and Fawzi Marrar -- were members of Arafat's elite security force, the Palestine Red Crescent Society said. They were in a vehicle that was hit by an Israeli missile.

The IDF said the vehicle was targeted because Halawah "has been a member of a military organization since the end of October 2000. This organization is responsible for a large number of murderous attacks carried out against Israeli civilians. Recently he was also involved in planning a number of big attacks."

Palestinian security sources said Halawah was a commander of Al Aqsa Martyrs Brigades, a military wing of the Fatah movement; Marrar also belonged to the organization, they said.

Al Aqsa has claimed responsibility for a rash of recent suicide bombings and gun attacks against Israelis, and it vowed swift revenge for this attack.