10.00pm UPDATE
GAZA - Israeli helicopters killed Hamas leader Sheikh Ahmed Yassin as he left prayers at dawn on Monday in Israel's highest profile assassination of a Palestinian in nearly 16 years.
At least seven other people died in the Gaza City missile strike on the wheelchair-bound cleric, 67, who co-founded Hamas, an Islamic militant group that killed hundreds of Israelis in suicide bombings.
In the first sign of revenge within Israel, a Palestinian with an axe hurt three people outside an army base near Tel Aviv, Israeli police said. Previous assassinations have triggered waves of violence.
Hundreds of thousands of Palestinians marched in Gaza, shouting deafening calls for retaliation. Hamas and other Palestinian militants vowed revenge.
After the first missile strike, a witness told Reuters, "I looked to see where Sheikh Ahmed Yassin was. He was lying on the ground and his wheelchair was destroyed. People there darted left and right. Then another two missiles landed."
Prime Minister Ariel Sharon ordered the strike himself, Israeli security sources said.
The attack appeared aimed at weakening Hamas to prevent it from claiming victory should Israel complete its planned unilateral pullout from the teeming strip, home to 1.3 million Palestinians.
Witnesses said Israeli troops shot dead one protester in the Gaza Strip and protests spread to the West Bank in scenes reminiscent of the start of a Palestinian uprising that erupted in 2000. Mosques called an immediate general strike.
It was the highest-profile assassination of a Palestinian since the April 1988 killing in Tunis of Palestinian commando chief Khalil al-Wazir.
The Palestinian Authority, in off-and-on negotiations with Israel for a decade, described Yassin's killing as a "crazy and very dangerous act" that opened the door to chaos.
Yassin's movement ran a broad welfare network that benefited Palestinians and sought to destroy the Jewish state for seizing and settling Arab land. Hamas is an acronym for "zeal".
An Israeli cabinet minister compared Yassin to al Qaeda leader Osama bin Laden and said the killing was meant to "create quiet". As a precaution, the Israeli army sealed off the West Bank and Gaza Strip to stop any Palestinians entering Israel.
Palestinians, many in tears, poured into Gaza streets. Militants fired in the air and threw pipe-bombs. Protests spread to the West Bank, where Palestinians also seek statehood. Youths stoned Israeli troops in Bethlehem. Black smoke coiled from tyres set ablaze by demonstrators in Nablus, Jenin and Ramallah.
All that remained at the scene near a Gaza City mosque was Yassin's bloodied wheelchair.
"They are the killers of prophets and today they killed an Islamic symbol," said Abdel Aziz al-Rantissi, now the most prominent face of Hamas. "It's a war on Islam... What happened was beyond the assassination of Sheikh Ahmed Yassin, they wanted to assassinate the Palestinian cause."
Police said they arrested a Palestinian after the axe attack on three Israelis near Tel Aviv. Nobody was seriously injured.
"Our mourning will never end until hundreds of Israelis are killed, until Sharon is dead," said Ali Taha, a 34-year-old mechanic in Gaza. "We are all Yassin. We are all willing martyrs."
Each side has been trying to bloody the other as much as possible ahead of the possible pullout of the 7500 Jewish settlers from the Gaza Strip proposed by Sharon.
Israel stepped up strikes after a suicide bombing killed 10 people at the port of Ashdod last week. The bombers got through defences around Gaza that were previously thought impenetrable.
Hardline Israeli cabinet minister Uzi Landau compared Yassin to bin Laden and said "there is no doubt that the goal is to create quiet and there is no other way to bring about calm other than to fight terror".
But there was dissent in Sharon's coalition cabinet and two centrist ministers voted against killing Yassin.
"I think the damage outweighs the benefit: Killing him will not eliminate Hamas," said Interior Minister Avraham Poraz.
Palestinian Prime Minister Ahmed Qurie accused Israel of trying to provoke anarchy and called the killing a "crazy and very dangerous act. It opens the door wide to chaos."
A senior official of the US State Department urged all sides to remain calm. The United States, which brands Hamas a terrorist group, has been trying with little success to revive a dormant "road map" for peace in the Middle East.
Hamas said it believed Washington had given the green light for Yassin's assassination.
"War, war, war on the sons of Zion. An eye for an eye. There will be a response within hours, God willing," said a statement from the al-Aqsa Martyrs Brigade, part of Palestinian President Yasser Arafat's Fatah faction behind many suicide attacks.
- REUTERS
Herald Feature: The Middle East
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Israel assassinates Hamas leader, group vows revenge
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