Four Palestinians have been killed and almost 200 wounded in clashes with Israeli troops as protesters staged a "day of rage" on the West Bank and in the Gaza Strip.
A brief lull in the month-long conflict came to an abrupt end yesterday with demonstrations throughout the Palestinian territories and a prolonged exchange of fire between the two sides on the West Bank.
The gun battle took place in the Palestinian-ruled town of Ramallah. Witnesses said Israeli troops responded to Palestinian snipers with machinegun fire and a number of tank-shells. A 27-year-old man died from a bullet-wound to the chest; at least two dozen Palestinians and one Israeli soldier were reported wounded.
Violence also erupted after the Muslim service of Friday prayers at the northern West Bank towns of Tulkarem and Qalqilya, resulting in two deaths. A fourth Palestinian was shot dead at the Erez crossing between Israel and the Gaza Strip; and there were disturbances also at Rafah and Khan Yunis in southern Gaza.
In Gaza City about 5,000 people, some firing weapons into the air and others dressed as suicide bombers, attended the funeral of Nabil Faraj al-Arrir, a member of the radical Islamic Jihad movement, who died after riding a bicycle laden with explosives into an Israeli army post, slightly wounding one soldier.
Over 135 people, all but eight of them Arabs, have been killed in a month of bloodshed. An Israeli army spokesman said: "The basic assumption of the IDF [Israeli Defence Forces] is that the year 2001 will be a year of unrest."
On the Israeli political scene, there were different assessments of the state of negotiations between the ruling Labour Party and the right-wing Likud Party over the formation of an emergency coalition government.
The acting Foreign Minister, Mr Shlomo Ben-Ami, said there was now a strong possibility of a general election because a Likud veto over the peace process was unacceptable. But a spokesman for Likud said agreement on several points had been reached and he was cautiously optimistic about a successful outcome.
The Prime Minister, Mr Ehud Barak had approached the Likud leader, Gen Ariel Sharon, for talks about an emergency administration but it is understood disagreement arose because the Likud leader wanted joint decision-making powers in matters relating to the security crisis and the faltering peace process.
A Labour spokesman said the party would remain in contact with Likud despite the failure to agree terms up to now. Mr Barak has taken a timeout from the peace process but stressed that any administration he led would continue the search for a settlement with the Palestinians.
Mr Barak is seeking the support of Gen Sharon to keep his government in power when the Knesset (parliament) resumes after its summer recess on Monday. Otherwise there is a strong possibility Mr Barak's administration will be voted out of office.
Mr Ben-Ami hinted in a television interview that he and others would not be able to support an administration which gave a veto to Gen Sharon, although he did not consider a deal of that kind was likely.
Palestinians have warned that such an alliance would destroy the peace process. They say the general's September 28th visit to a Jerusalem site which is holy to both Muslims and Jews provoked the latest round of unrest.
President Clinton spoke to Mr Barak on Thursday night in a telephone conversation that lasted about 30 minutes and focused on implementation of the accords reached at the recent Sharm al-Sheikh summit in Egypt, which included a cease fire.