Israeli forces killed three Palestinians in operations in the Gaza Strip as the Palestinian leadership crisis intensified, scuttling peace efforts and endangering a donors conference.

People in the village of Almusader, in central Gaza, said Israeli special forces entered a house there early Friday and exchanged fire with gunmen, killing one before withdrawing two hours later.

Israeli military officials, however, denied entering a village. The officials, speaking on condition of anonymity, said soldiers deployed outside Khan Younis to prevent attacks by militants on Kfar Darom, an isolated Jewish settlement in Gaza. The officials said the troops shot at two armed Palestinians and hit them.

A few hours earlier, not far away, two Palestinians were killed and nine wounded, including two women, in an exchange of fire between armed Palestinians and Israeli soldiers on the outskirts of the city of Khan Younis, Palestinians said.

In the West Bank on Thursday, two Palestinians were killed by Israeli forces.

Israeli soldiers fired at a taxi circumventing a roadblock, killing a passenger, Palestinians said. An Israeli military official said a passenger threw a bag at soldiers, and the taxi driver ignored orders to halt, before soldiers opened fire.

Also, in the West Bank city of Nablus, a 38-year-old woman was killed during a gunbattle between Israeli soldiers and gunmen. The woman was standing on the balcony of her home when she was hit by a bullet, doctors said.

The Palestinian leadership deadlock between Yasser Arafat and Prime Minister Ahmed Qureia is holding up renewal of high-level contacts with Israel, and it might derail a conference of international donors who have been supporting the cash-strapped Palestinian Authority.

At issue is the appointment of an interior minister who would consolidate the security forces — some of which are under the command of Arafat — and play a key role in possible action against violent groups.

Arafat has blocked Qureia's choice for the job, Gen. Nasser Yousef, in part because he does not want to relinquish control over the security services. Qureia's successor, Mahmoud Abbas, was pushed out by Arafat over the same issue.

Arafat and Qureia met Thursday, along with leaders of the ruling Fatah movement, but failed to resolve the dispute.

The United States has been pushing for consolidation of the security forces under control of the prime minister as a precursor for action against militants. However, Qureia has said he prefers a negotiated end to violence, not a crackdown.

Officials close to Finance Minister Salam Fayad said his boycott announcement was meant to pressure Arafat to stop holding up the formation of the new Cabinet.

Fayad, who has close ties with Bush administration officials, framed his decision to stay home in legal terms, saying the one-month term of Qureia's emergency government expired Tuesday, and that an extension granted by Arafat was illegal.

"This emergency government cannot be a caretaker government," Fayad told The Associated Press. "Thus I think there is no legitimacy to this government, and we have to respect the law."

Fayad's boycott could scuttle an international donor conference in mid-November, a setback for the Palestinian Authority, which relies heavily on foreign support. At the donor meeting, Fayad, a former International Monetary Fund official, was to have presented the Palestinian budget for 2004 and make a pitch for additional money.

A diplomat said the meeting might not take place if a new Cabinet is not installed. The diplomat spoke on condition of anonymity.

In another development, a Palestinian woman who lured an Israeli teenager to his death through Internet flirtation was jailed for life by an Israeli military court.

Freelance journalist Amne Muna exploited 16-year-old Ophir Rakhum's "yearning for love" to forge an emotional bond with him through their Internet chats, which she used to tempt him to a meeting, the ruling said.

According to the charge sheet, Muna — 24 years old at the time of the January 2001 killing — picked Rakhum up in a car in Jerusalem and drove him a short distance into the West Bank, where two accomplices were waiting. They ordered Rakhum out of the car, and when he refused, they shot him to death, the indictment said.

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