Israel Agrees To Demolish Its Settlers' Gaza Homes

Israeli officials said an Israeli soldier was killed and two others were wounded Sunday morning when Palestinian gunmen fired an anti-tank missile at an Israeli military post along Gaza's heavily fortified border with Egypt. In apparent coordination, the attack came moments before Palestinian fighters fired rocket-propelled grenades and light arms at Israeli soldiers and civilians engaged in construction work nearby, Israel military officials said.

The area has been a major smuggling route for armed Palestinian groups bringing weapons into Gaza. Islamic Jihad and Ahmed Abu Rish Brigades, an armed offshoot of the Fatah political movement, asserted joint responsibility for Sunday's attack. One Palestinian gunman was killed in the ensuing gun battle.

On Monday morning, according to the Israeli army, Palestinian gunmen from the group Islamic Jihad killed a 30-year-old Israeli settler and wounded his 16-year-old passenger when the men fired on the Israelis' car on the northern West Bank. The Israelis were from the nearby settlement of Hermesh.

A few hours later, Israeli soldiers shot and killed a 17-year-old Palestinian in the Gaza strip. He was in a closed military zone near the settlement of Netzarim, the Israeli army said, and ignored instructions that he leave delivered over a loudspeaker and subsequent warning shots.

Among the issues Israeli officials hoped to resolve during Rice's visit was the Bush administration's concern over Israeli arms sales to China, something that has caused friction between the United States and Israel over the past six months. Israeli press reports Sunday suggested that the United States would be given the right to review all future Israeli arms sales to foreign countries, although Israeli officials said an agreement on the matter had not been reached.

Visiting Jerusalem on Sunday, Chinese Foreign Minister Li Zhaoxing told reporters that bilateral trade with Israel would double in the coming years.

The United States has expressed concern over Israeli weapons sales to China for the past 15 years. But the issue came to a head five years ago when U.S. pressure scuttled Israeli plans to sell Phalcon reconnaissance aircraft to China, a deal valued at between $250 million and $1 billion.

The most recent dispute arose last year over Israel's plans to provide spare parts for a fleet of Harpy armed drone aircraft it originally sold to China in the late 1990s with U.S. approval. U.S. defense officials complained that the spare parts constituted a significant upgrade of the aircraft. In protest, the Pentagon froze cooperation with Israel on several joint weapons projects.

"If things were done that were not acceptable to the Americans, then we are sorry, but these things were done with the utmost innocence," Foreign Minister Silvan Shalom said on Israeli radio Sunday.