RAFAH, Gaza Strip, 30 August - Israeli tanks thrust into Palestinian-ruled territory in the Gaza Strip yesterday, sealing off a town, destroying police outposts and raising the Israeli flag.

The Israeli army denied its forces had entered Palestinian- controlled areas near Rafah on the Egyptian border, but Reuters correspondents on the scene saw tanks penetrating several kilometers  into southern Gaza. The latest incursion, little more than a day after Israeli forces reoccupied part of the Palestinian-controlled West Bank town of Beit Jala, and new violence raised the temperature in an 11-month-old conflict.

At least four Palestinians and an Israeli were killed yesterday in the latest bloodshed in the Palestinian uprising that began last September after peace talks deadlocked.

Among the four Palestinians killed was a member of Palestinian leader Yasser Arafat?s elite guards unit Force 17 who died in Hebron shortly after being shot by Israeli forces in the center of the West Bank city. Force 17 member Abud Dabassi, 32, died at Ahli hospital in Hebron, while 15 others were injured in Israeli tank fire. Palestinian security and officials said that in another attack Palestinians, including children, were shot and injured when the army opened fire on a bus. At least, eight passengers were hurt.

Crown Prince Abdullah, deputy premier and commander of the National Guard, held talks by telephone with French President Jacques Chirac on the escalating Middle East situation. They discussed the Israeli military campaign against unarmed Palestinians and its effect on the peace process.

In a sign that both sides may be looking to pull back from the brink, Israeli and Palestinian officials agreed to a cease-fire in Beit Jala that would be followed by an Israeli pullout from the town.

The deal, brokered by the European Union, appeared on shaky ground after heavy shooting erupted as night fell.

Palestinian security officials said the agreement called for Israeli forces to pull out at night from Beit Jala, on the outskirts of Bethlehem. But Raanan Gissin, a spokesman for Israeli Prime Minister Ariel Sharon, said the timing of a withdrawal would be dependent on whether Palestinians stopped firing on Gilo. Israel has vowed to remain there in defiance of international condemnation. UN Secretary-General Kofi Annan yesterday asked the Israel to end target killings and the occupation of  Beit Jala. Annan said the Israeli military occupation of Beit Jala will ?only further inflame the passions in the region.