OCCUPIED JERUSALEM, 26 August — Two Palestinian fighters killed three Israeli soldiers and wounded seven after storming their base near a Jewish settlement bloc in Gaza yesterday in one of the most daring Palestinian attacks during 11 months of intifada.

Late last night, Israeli military radio said three Israelis were shot dead when Palestinian fighters opened fire on a car traveling between Jerusalem and Modiin, west of the city. Among the dead were a Jewish settler couple from the area, it said, quoting medical sources. One of the victims died on way to hospital, while two children were slightly wounded, it added.

“Three soldiers were killed in Gaza this morning by two Palestinians who came into their base and opened fire and threw several grenades. One of the Palestinians was killed. The second escaped and was later killed by soldiers,” an Israeli Army spokeswoman said.

The military wing of the Democratic Front for the Liberation of Palestine (DFLP), the Palestinian National Resistance Brigades, said it was behind the raid.

“This heroic attack comes in response to the ugly war of aggression launched by the criminal (Prime Minister Ariel) Sharon government against our people and the assassinations and incursions,” the Damascus-based group said in a statement.

Palestinian police and factions evacuated all offices in the Gaza Strip in anticipation of Israeli retaliation. “This attack is particularly serious because they have penetrated into an Israeli base... Israel will respond accordingly,” government spokesman Avi Pazner said.

Israel’s Defense Ministry said in a statement it was awaiting the outcome of an army investigation into the shootings, which it called an example of Palestinian Authority involvement in “supporting and initiating terror activities”.

The pre-dawn raid was the first major Palestinian military success against the Israelis since the start of the intifada last Sept. 28, and was being seen as a major fiasco for the Israeli armed forces. It was too early tell to tell whether yesterday’s raid represented a major change of tactics in the intifada, or was just an isolated incident.

Conceding the episode revealed military “weaknesses”, the army said it would carry out a reconstruction of events. The Southern Command in charge of the area said the attackers had stormed into the post after arriving via a hidden route. They fired 20 to 40 bullets and hurled up to 10 grenades in a firefight that lasted eight to 10 minutes. DFLP members identified the men as Amin Abu Hatab, 26, and Hisham Abu Jamous, 24, from Rafah city, south of Gaza. Both were members of the Palestinian military intelligence apparatus.

DFLP official Salah Zeidan denied Israel’s version that Abu Jamous was shot dead as he fled, saying he was caught alive and “brutally tortured before being executed by soldiers”. Hospital sources said the body was bruised and showed signs of burns.

A DFLP source said 10 Palestinian fighters from the Palestinian National Resistance Brigades, set out before dawn for the raid on the settlement, which lies between Rafah and Khan Younis, south of Gaza. “The fighters arrived at the place after one and a half hours. At 3.15 a.m. they took their positions around the military post after dividing themselves into two groups,” the source said. One group was to protect the other launching the raid.

The attack took the Israeli soldiers by surprise. The Palestinian fighters opened fire with assault rifles and threw grenades at the base. Some of the soldiers were sleeping at the time of the raid. The firing from both sides continued for half an hour, the source said. The Israeli general in charge of the base said his troops and the Palestinians at one time had been locked in hand-to-hand combat.

Zaidan said DFLP will continue attacks as long as Israel occupied Palestinian land.

Arafat, on an Asia tour to garner support for the Palestinian cause, attacked Israel’s use of “American weapons” such as fighter jets and tanks. He said the weapons were being used against “women and children, houses, villages and towns.”

The Palestinian leader was speaking to reporters in the Malaysian capital Kuala Lumpur.