Israelis wrestle with attack outcome

Plans to ease restrictions on Palestinians to go forward

Israeli Foreign Minister Shimon Peres

JERUSALEM (CNN) -- As Israel coped with internal debate and international criticism a day after it killed a top Hamas commander and 14 others in Gaza, Israeli Foreign Minister Shimon Peres said Wednesday he does not support "the results of the attack," which killed nine children.

As he did immediately following the attack, Peres expressed regret that the attack on Salah Shehade killed civilians, especially the children. Shehade's bodyguard, Zaher Nassar, was also killed.

"I don't support and nobody supports the results of the attack," said Peres. "All of us are terribly sorry for the loss of life of civilian people, and particularly children."

"A mistake is a mistake, and I cannot explain mistakes, but I can say, it [the attack on Shehade] was postponed on eight different occasions, when we were in the footsteps of Mr. Shehade, whom I called a local bin Laden, and every time it was postponed because the danger that civilian life will be in danger."

Palestinian Authority chief spokesman Saeb Erakat expressed optimism about Peres' comments.

"It's a good sign to hear Mr. Peres speaking," Erakat said. "I think he is the first Israeli official to apologize for this, and I hope that many Israeli officials will condemn this crime, which will not be justified."

Erakat said the attack was an act of revenge. "I don't think Palestinians and Israel should be seeking revenge," he said. "They should seek a way out of this vicious cycle."

Peres said Shehade, who headed the Izzedine al-Qassam Brigade, the military wing of the Islamic group Hamas, was "responsible for the deaths of 200 persons in our country. He was planning more deaths. We asked the Palestinians to arrest him."

"Shehade is a local bin Laden," Peres said.

On Wednesday, the Israel Defense Forces and Shin Bet security services were investigating why the decision was made to drop a one-ton bomb on the building where Shehade was staying, Israeli military sources said.

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Senior Israeli military officials told the Ha'aretz newspaper that had Prime Minister Ariel Sharon and Defense Minister Benjamin Ben-Eliezer known innocents were in the area they would have put off killing Shehade.

Knesset Foreign Affairs and Defense Committee Chairman Haim Ramon told the Israeli paper that "the central error was that we used weaponry that anyone involved in the decision-making process should have known could harm innocent people living in the area."

The U.S. State Department has labeled Hamas, a Palestinian Islamic fundamentalist group, a terrorist organization. Izzedine al Qassam has admitted responsibility for terrorist attacks against Israeli civilians as well as attacks against the Israeli military.

Meanwhile, on Thursday, Palestinian gunmen fired on a car killing an Israeli and moderately wounding another, the IDF told CNN. The incident occurred near the Alei Zahav settlement south of Qalqilyah in the West Bank.

Prior plans to ease restrictions

Peres' expressions of regret came as Israel was going ahead with plans to ease restrictions on Palestinians, including the release of about $45 million in Palestinian tax revenue and an increase in the number of Palestinians allowed to work inside Israel.

The moves already were under discussion before Tuesday's attack left some 150 people wounded, in addition to the 15 deaths.

Peres said Israel also is considering pulling its forces out of the West Bank towns of Bethlehem and Hebron if the Palestinian Authority can guarantee it will prevent militant activity there.

Peres said Ramallah, where Palestinian Authority President Yasser Arafat has offices, also may be included if the Palestinians present an acceptable security plan.

The decisions were made during a meeting of the Israeli government's so-called steering committee on the peace process, he said. In addition to Peres, the panel includes Sharon and his defense and finance ministers.

A Palestinian woman stands by a pile of blankets she recovered Wednesday from her destroyed home in Gaza.

Israel now allows 4,000 Palestinian workers inside the country, and that figure will be raised to 7,000, Peres said. That number, he said, may be increased later to 30,000. Palestinians depend heavily on paychecks from Israel.

Peres said he had informed Palestinian officials of those decisions.

No new Israeli-Palestinian talks are scheduled, but Peres said there could be more in the coming days.

Condemnation of Israeli airstrike

International reaction to the Israelis' move has been harshly critical.

U.N. Secretary-General Kofi Annan issued a statement saying, "The government of Israel must halt such actions, and it must conduct itself in a manner which does not allow for the killing of innocent civilians."

European Union foreign policy chief Javier Solana said in a statement, "I strongly condemn the death of innocent civilians in last night's attack against Gaza."

British Foreign Minister Jack Straw said in a statement, "The action taken last night, which resulted in the deaths of children among others in a missile attack in Gaza, is unacceptable and counterproductive."

White House press secretary Ari Fleischer said the Israeli attack was "heavy-handed" and "does not contribute to peace."

Children climb through rubble left by the Gaza attack.

But Sharon, speaking at a Cabinet meeting Tuesday, called the airstrike a success.

"We have no interest to hurt innocent civilians and are always sorry about civilians that are hurt but this action, according to me, is one of our biggest successes," Sharon said, "and of course obliges us to be on full state of alertness."

Nevertheless, Sharon asked the Israeli military to re-examine the attack.

"I would like the defense minister to review the latest operation carried out ... in which we hit maybe the most senior Hamas member of the military wing -- the one who organized anew, rebuilt the Hamas in Samarea on top of his activity in Gaza," Sharon said.

-- CNN Correspondent Chris Burns contributed to this report.