JERUSALEM - Lebanese guerrillas killed an Israeli soldier in a border ambush and two Palestinians were shot dead in West Bank fighting at the weekend, raising the spectre of two-front warfare as an Israeli unity government takes shape.
Amid the upsurge in violence, Terje Roed-Larsen, the United Nations special envoy to the Middle East, cautioned that without urgent economic aid the Palestinian Authority might soon collapse, leading to "chaos and anarchy" in areas under its control.
In an attack coinciding with the ninth anniversary of Israel's assassination of Hizbollah leader Sheikh Abbas al-Moussawi, guerrillas of the pro-Iranian group fired anti-tank missiles at an Israeli Army convoy on the Israel-Lebanon border.
The Army said one soldier was killed and two were wounded when a missile hit an armoured vehicle.
Two Palestinians were shot dead, one in the chest and the other in the neck, during heavy exchanges of fire between Israeli troops and Palestinian gunmen in the divided city of Hebron in the West Bank, local hospital officials said.
An Israeli Army spokeswoman said soldiers had fired at Palestinian gunmen after coming under attack but she had no information about Palestinian casualties.
Almost 400 people have been killed since the Palestinians started an uprising in late September against Israeli occupation of the West Bank and Gaza Strip.
Along the Lebanese border, the Israeli Army shelled several areas while Israeli combat helicopters hovered above. Witnesses said mortar shells had struck two Hizbollah border positions but there were no immediate reports of casualties.
Israel said its UN ambassador would make a formal complaint against Lebanon to the UN Security Council over the attack on its troops.
In the West Bank city of Ramallah, an Israeli tank blew a chunk out of high-rise building during what the Army described as a massive gun fight.
Medical sources said at least 10 Palestinians and two foreign photographers were wounded by Israeli gunfire.
Clashes also continued with Palestinians in the Gaza Strip, where soldiers and gunmen exchanged fire between the Jewish settlement bloc of Gush Katif and the Palestinian town of Khan Younis. There was no word of any casualties.
Last week in Gaza, Roed-Larsen estimated that since the Intifada began, the Palestinian economy had lost more than $US1 billion ($2.17 billion) due to Israeli closures of the West Bank and Gaza Strip and a paucity of international funds.
"In our opinion, there is a situation developing where there is first a fiscal collapse, then an institutional collapse of the Palestinian Authority, which will lead to further violence and a situation which might get completely out of control," he said in New York.
The increased violence came after Prime Minister-elect Ariel Sharon and the man he trounced in the recent election, Ehud Barak, announced an agreement in principle on a coalition.
Sharon, an arch-hawk, has said that a unity government, likely to include Barak as defence minister and Nobel Peace laureate Shimon Peres as foreign minister, would make ending the bloodshed and restoring security for Israelis a priority.
An aide to Palestinian President Yasser Arafat said prospects for peace were growing dimmer.
Ahmen Abdel-Rahman said that "forming a government with two ex-generals, Barak and Sharon, at its opposite poles would freeze the peace process and escalate violence in the whole area."
- REUTERS
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Warfare on two fronts looms for Israel
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