A Palestinian has fired from close range at an Israeli car, killing an Israeli security official along a major West Bank thoroughfare and jeopardizing a new, US mediated cease fire agreement.

A Palestinian has fired from close range at an Israeli car, killing an Israeli security official along a major West Bank thoroughfare and jeopardizing a new, US mediated cease fire agreement.

The gunman was killed by a passenger in the Israeli car, said Shmuel Ben–Ruby, Jerusalem police spokesman. Security sources said the Israeli victim was a security official.

The Israeli army did not comment on the victim's identity, but army spokesman Lt. Col. Olivier Rafovitch called the attack a "very grave incident." When asked what it meant for the cease–fire, Rafovitch said: "We are checking right now."

A Palestinian approached the Israeli vehicle, which was stopped at an area where Palestinian workers are picked up by Israeli employers for work in Israel, and shot and killed one person inside, Ben–Ruby said. Initially, Israeli authorities said a second Palestinian had accompanied the attacker, but there were conflicting reports.

The Israeli who returned fire also was injured, Ben–Ruby said. A 20–year–old man was in moderate to serious condition with bullet wounds in the jaw and neck, according to Yael Bossem–Levy, spokeswoman at Hadassah hospital in Jerusalem.

The attack followed a drive–by shooting, apparently by Israelis, late Wednesday night. Israeli media said their reporters received messages claiming a Jewish group seeking revenge for Palestinian attacks was behind that attack, which killed a Palestinian and wounded three others when gunmen opened fire on their truck from an oncoming car.

In a statement, the leadership of Jewish settlers "strongly condemned" the shooting, near the settlement of Maale Adumim east of Jerusalem.

Col. Avi Feder, deputy Israeli police commander in the West Bank, told Israel radio that Jewish vigilantes were one possibility being investigated.

Feder didn't elaborate, but Brig. Gen. Benny Gantz, the Israeli military commander in the West Bank, told Israel's army radio he suspects "a mistaken terrorist attack" by Palestinian gunmen.

The Israeli army reported that in the Gaza Strip early Thursday at least one mortar shell struck near a settlement, Palestinian gunmen fired on another settlement and at an army outpost, and a rifle grenade was fired at another outpost. Nobody was hurt in any of the incidents.

The Israeli military reported several Palestinian gunfire attacks late Wednesday, and said two mortar shells were fired an a Jewish settlement in Gaza. Palestinian officials said two children were wounded in Gaza by Israeli bullets.

Following a security meeting in Tel Aviv, attended by CIA director George Tenet, who drew up the truce plan, Israel ordered its army to start easing restrictions on the Palestinians, imposed after violence erupted last September and tightened after a June 1 suicide bombing in Tel Aviv that killed 21 people, most of them Israeli teen–agers.

After the session with Tenet and Israeli commanders, West Bank security chief Jibril Rajoub was downbeat.

"The Israelis are not dealing with the Tenet proposal seriously," Rajoub told The Associated Press. Another security meeting was set for Friday.

Maj. Gen. Giora Eiland, chief of military operations, said soldiers would begin to lift restrictions by mid–afternoon Friday, and Israeli forces would redeploy. The plan calls for Israel to pull its forces and heavy weapons back to points they held before the hostilities erupted.

Eiland said the timetable could be speeded up of the Palestinians work to prevent attacks. "The emphasis is on prevention," he told The Associated Press.

Palestinians said Israel was the side that must be put to the test. Information Minister Yasser Abed Rabbo said that Israel must stop construction in Jewish settlements, "stop atrocities by settlers" and lift restrictions that have crippled the Palestinian economy.

According to unofficial copies of the plan, Palestinians and Israelis are to make efforts to stop violence and incitement. The Palestinians must arrest militants planning attacks, confiscate illegal weapons like mortars and explosives and resume security cooperation with Israel.

The Israelis must lift restrictions and roadblocks, refrain from attacking Palestinian institutions and civilian areas and use non–lethal methods to deal with Palestinian demonstrations.

U.S. President George W. Bush also played down expectations, saying the emerging agreement was just a first step. "It's still a fragile situation there," Bush said Wednesday during a stop in Brussels on the second day of a European tour.

On Thursday, Greek Orthodox monks at a monastery in Wadi Kelt, near Jericho, were to bury Father Germanos, 34, who was shot and killed late Tuesday in an ambush, apparently by Palestinians.