OCCUPIED JERUSALEM, 28 October — The right-wing Israeli government of Ariel Sharon received a double blow yesterday when a Palestinian blew himself up, killing three soldiers and the Labour partner of the coalition vowed to vote against the budget.

Three soldiers were killed when the Palestinian blew himself up at a West Bank Jewish settlement. Two Palestinian men were killed in a gunbattle with Israeli troops to the north in Nablus. A Palestinian teenager was also killed by an Israeli sniper in Jenin, under curfew after the army swarmed in on Friday.

After the bombing, claimed by the Al Aqsa Martyrs Brigades, an armed offshoot of the Fatah, enraged settlers from a nearby Jewish community attacked Palestinian farmers and foreign peace activists trying to protect them. The group named the bomber as Muhammed Shkeir, 19, from Nablus.

The three soldiers were killed when they tried to tackle the well-dressed Palestinian bomber, spotted at a gas station at the entrance of Ariel settlement, halfway between Ramallah and Nablus.

Israeli media said it was possible a bullet fired by a soldier had detonated the bomber’s explosives. Medical sources said 17 people were admitted to hospital for treatment.

The blast was the second attack in a week, after two Palestinians from Islamic Jihad rammed an Israeli bus with a jeep packed with explosives last Monday, killing 13 Israelis.

Hours after yesterday’s bombing, a special Israel undercover unit raided Ras El Ayin in Nablus, although it was not immediately clear if the operation was linked to the attack.

Two Palestinians were killed in an exchange of fire that erupted when gunmen spotted the Israeli unit in an unmarked civilian car. The two were identified by Palestinian officials as Ahmed Jadallah, 24, and Ala Khadari, 23.

In Jenin, 15-year-old Palestinian Ahmed Abu Ghali was killed when an Israeli sniper shot him in the head after he stepped outside his house. The latest deaths bring the toll of two years of the Palestinian uprising to 2,622 people killed as a direct result of the violence, including 1,940 Palestinians.

The bombing coincided with Sharon’s biggest Cabinet dispute since taking office 19 months ago — a crisis over settlement-funding that threatened to shatter his ruling coalition. The Labour Party’s central committee gave its green light to the parliamentary faction to vote down the government’s austerity budget.

The committee, with more than 1,000 members, almost unanimously backed the motion by party leader and Defense Minister Binyamin Ben Eliezer, without saying whether deputies would actually vote it down in a parliamentary debate on Wednesday.

Labour wants the allocation of $150 million to Jewish settlements cut as part of the belt-tightening measures.