Israeli troops killed a Palestinian militant commander on Thursday, triggering vows of revenge in increasing signs that a six-week-old truce critical to a new peace plan could collapse.

Israeli soldiers check the area where Islamic Jihad militant leader Mohammed Ayoub Sider was killed during an army operation in the West Bank city of Hebron August 14, 2003.  [Reuters]

Fresh violence since an army raid last week that killed two Hamas militants and prompted two avenging Palestinian suicide bombings on Tuesday has overshadowed diplomacy to prevent the U.S.-orchestrated "road map" plan from unravelling.

Witnesses in Hebron, a West Bank stronghold of Muslim militants, said Israeli troops surrounded a building in search of Mohammad Seder, local head of Islamic Jihad's armed wing, touching off a gunfight followed by explosions in the premises.

A senior Islamic Jihad official said a body found at the house was that of Seder. A Reuters reporter at the scene said the body was removed with a machine gun still in his hands.

Israeli military sources said as the operation began that Seder was wanted on suspicion of organising a car-bomb attack and that they were trying to arrest him.

"The Jerusalem Brigades reserve the right to respond to the Zionist...assassination of mujahid leader Mohammad Seder despite the truce declared by the factions," the Neda al-Quds Web site, closely affiliated with Islamic Jihad, said.

"The response will be quick, like an earthquake and in the depth of the Zionist entity," it added, referring to Israel.

"We assure our people that resistance has a long arm and these crimes will not pass without punishment," Bassam Assadi, a senior West Bank Islamic Jihad official, said on Qatar-based al-Jazeera satellite television.

ARMY DEMOLISHES HOME OF SECOND SUICIDE BOMBER

Two suicide bombers from Nablus killed two Israelis on Tuesday in what their militant factions called acts of revenge for an army raid that killed two wanted Hamas men in the West Bank city last week.

In response, the Israeli army demolished the family home of one suicide bomber on Wednesday and the other early on Thursday, both in Nablus's Askar refugee quarter.

But it eschewed major military action common in the aftermath of past suicide bombings in a 34-month-old Palestinian uprising, heeding U.S. pressure to avoid wrecking a peace plan already mired in disputes over who should take what step first.

"As part of counter-terror efforts, Israeli forces in the Askar refugee camp overnight demolished the home of Islam Yusuf Kafishi, who carried out Tuesday's suicide bombing at the entrance to Ariel," an army statement said.

Ariel is a large Jewish settlement in occupied West Bank territory where, along with the Gaza Strip, Palestinians would be granted statehood by 2005 under the "road map" plan drafted by a U.S.-led quartet of peacemakers.

Palestinian Prime Minister Mahmoud Abbas has bemoaned continued army swoops for wanted men, saying these were goading militants to upset the truce. Israel says it has no choice as Abbas was not disarming militants as the road map requires.

Militant faction chiefs indicated Tuesday's bombings were a one-off reaction and said they stood by the truce they declared along with Palestinian President Yasser Arafat's Fatah faction.

But a senior Islamic Jihad official said the raids showed Israel was not truly interested in calm to advance the road map, which its government, dominated by rightists opposed to territorial givebacks, accepted only under heavy U.S. pressure.

"It is clear Israel...only wants to suppress the Palestinian people. We view what is happening as serious violations of the truce and a Zionist attempt to foil it," Mohammed al-Hindi told Reuters in Gaza.

Israeli troops on Thursday also arrested at least two wanted militants in raids into Nablus and Qalqilya, an army spokesman said. Qalqilya residents said troops burst into houses and hustled away three men, none of them known militants.

Despite new tensions whipped up by the latest bloodshed, Palestinian security chief Mohammed Dahlan and Israeli Defense Minister Shaul Mofaz planned to meet on Thursday to discuss steps on the road map, Palestinian security officials said.

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