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Three Palestinian children were killed on Wednesday afternoon in a blast in the northern Gaza Strip, when an Israel Defense Forces tank fired on a Qassam rocket launcher.

Dr. Moaiya Hassanain of the Palestinian Health Ministry said 10-year-old Mahmoud Ghazal and his 12-year-old cousin Yehiya Ghazal were killed immediately. Their 10-year-old cousin Sara Ghazal was critically injured, and died later from her wounds.

The IDF said it fired on the Qassam launcher after it detected unidentified figures next to it.

A relative of the children, Wasfi Ghazal, said he heard the sound of an explosion and then children screaming. He held both Israel and the militant rocket squads responsible.

"We are victims of the occupation and victims of the misbehavior of some of the fighters who are randomly choosing our area to target Israel," he told The Associated Press.

The IDF expressed sorrow for the deaths of the children, but blamed militant groups.

"The strike was the result of children being located in the area and aiding terror groups that are doing nothing to distance them from there," according to a statement issued by the Army Spokesman's Office.

Chief Palestinian negotiator Saeb Erekat condemned the killing of the children, predicting violence would breed more violence.

"This will add to the complexities and feed the fire," Erekat said.

Taher Nunu, a spokesman for Gaza's Islamic militant Hamas rulers, said the attack on the heels of the Olmert-Abbas meeting reaffirms Israel's aggressive intentions, and its disinterest in reaching an understanding with the Palestinian side. He called on Abbas to stop meeting Olmert.

About two hours earlier, a Qassam rocket was launched from the Gaza Strip into Israel, and landed in fields just north of Kibbutz Nir-Am in the western Negev. The rocket did not cause any damage.

30 Palestinians lightly wounded during IDF raid in QalqilyahSome 30 Palestinians were lightly wounded on Wednesday during an Israel Defense Forces arrest raid in the West Bank city of Qalqilyah.

Palestinian sources said a majority of those wounds were from tear gas and rubber bullets fired by IDF troops in the course of the operation.

Troops surrounded a cluster of homes in which the IDF said a wanted militant was hiding.

The troops called over loudspeakers for the militant to surrender, but were met with no response. During the operation IDF bulldozers demolished two of the homes in the compound in an attempt to force him out.

The militant managed to escape, but troops arrested another man who through explosives at them.

The operation comes despite a renewed diplomatic drive to forge an agreement with Palestinian Authority Chairman Mahmoud Abbas and his Fatah-led government in the West Bank.

Prime Minister Ehud Olmert and Abbas met Tuesday in Jerusalem, for talks that touched on the thorniest final status issues dividing the sides final borders, the future of Jerusalem, and Palestinian refugees.

Israel is also considering Abbas' request, made at Tuesday's meeting, to include in its amnesty for Fatah fugitives 26 militants expelled in 2002 after a siege on the Church of the Nativity in Bethlehem.

Also Tuesday, A Qassam rocket fired by Palestinian militants in the Hamas-controlled Gaza Strip struck a home in the western Negev town of Sderot, lightly wounding one person.