Israeli troops killed seven Palestinians including five paramilitary policemen in what the US called a very disturbing flare-up on the eve of the most emotionally charged day of the Palestinian calendar.
The killing of five paramilitary police in the West Bank early today was the highest death toll in a single incident for almost two months. It came hours after Israeli helicopter gunships and boats rocketed Palestinian security posts in Gaza.
Israeli soldiers also shot dead two Palestinians after a grenade attack in Gaza, bringing the toll to 420 Palestinians, 79 Israelis and 13 Israeli Arabs killed since a revolt erupted last September after peace talks reached a stalemate.
In other violence, Palestinian gunmen in the West Bank opened fire on the Jewish settlement of Gilo at the edge of Jerusalem, wounding four civilians, Israeli police and witnesses said. Israel considers Gilo to be a neighbourhood of Jerusalem.
Palestinian President Mr Yasser Arafat described the killing of the five policemen as a "dirty, immoral operation and not a military one".
"Israel must know that it will be harshly judged over this crime", Mr Arafat said after meeting European Union envoy Mr Miguel Moratinos in Gaza, charging Israel with assassinating the security men.
Tens of thousands of Palestinians marched through the West Bank city of Ramallah behind ambulances carrying the bodies of the five, who are due to be buried in Gaza.
Palestinians are preparing to mark the Nakba, or Great Catastrophe, of mass displacement from areas of British-mandate Palestine which were taken over by Jews in the 1948 Arab-Israeli war.
Israeli forces will be on high alert for Nakba day. Palestinians plan to bring life to a halt in the West Bank and Gaza for three minutes on Tuesday.
In Washington, US Secretary of State Mr Colin Powell expressed alarm over the latest upsurge, saying: "It's very disturbing that the cycle of violence continues to go upward. We will speak out to both sides, encouraging both of them to do everything they can to reducethe level of violence", he said.