A husband and his pregnant wife from Kiryat Arba were killed last night when a suicide bomber blew himself up alongside homes belonging to Jewish settlers living in the West Bank city of Hebron.

The victims were identified as Gidi and Dina Levy, aged 31 and 37 respectively.

Also late last night, a Palestinian militant carried out a shooting attack on the settlement of Sha'arei Tikva close to the Green Line, injuring at least one resident there.

Last night's suicide attack was the first since the beginning of the intifada that was carried out in a Palestinian city, and came just hours before Prime Minister Ariel Sharon and his Palestinian counterpart, Mahmoud Abbas (Abu Mazen) were scheduled to meet in Israel for the first talks between the leaders of the two sides in almost three years.

In the wake of the attack, the Israel Defense Forces declared the area a closed military zone and imposed a curfew on most parts of Hebron. Israel Air Force planes dropped flares to light up the skies over the area, while troops conducted searches.

Military sources said the bomber was disguised as a settler and was wearing a white shirt, the customary attire for religious Jews on the Sabbath. According to the sources, the man, identified as Hamas activist Fuad Qawasmeh, 21, approached a military post in Gross Square, close to the settler neighborhood, arousing the suspicion of troops stationed there.

Despite Qawasmeh's known affiliation with Hamas, no Palestinian organization officially claimed responsibility for the attack.

When the soldiers called on the man to stop, he fled and blew himself up next to two settlers standing nearby.

"This is another in a string of attacks against innocent Israelis," David Baker, an official in the Prime Minister's Office told Haaretz. "It's further proof that the Palestinian Authority must take the matter of fighting terrorism seriously."

In confrontations this weekend in the Gaza Strip town of Beit Hanun, seized earlier in the week by IDF troops, a Palestinian gunman was killed by army fire, doctors said. Nine people were wounded, including a gunman and five teenage boys.

On Friday, an IDF soldier was seriously wounded when an explosive device blew up near a tank in Beit Hanun. Troops have been in the town since early Thursday morning in an effort to thwart Qassam rocket attacks on Negev towns.

Palestinian sources said earlier in the day that the rockets were now being fired from the area of the Jabalya refugee camp in the Gaza Strip, and not from Beit Hanun, Israel Radio reported.

Palestinians fired a Qassam rocket at the northern Negev town of Sderot on Friday evening, damaging the roof of the Tapud factory, in the Sha'ar Hanegev industrial zone. No injuries were reported.

Israeli security officials defended the IDF presence in the northern Gaza town of Beit Hanun, saying the operation there prevented Palestinians from firing rockets from that area.

Major General Doron Almog of the Southern Command said Thursday afternoon that the IDF would remain in Beit Hanun for several days.

The IDF shot and killed a mentally ill Palestinian near the West Bank city of Nablus on Friday evening, Palestinian sources said. The man was identified as Taher Abdeh, 23.

The army said it fired at the man after he had ignored a warning shot and several verbal commands not to approach the army post.