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Twelve Palestinian gunmen, three of them civilians, were killed yesterday in a clash with the Israel Defense Forces in the Sajiyeh quarter, in eastern Gaza City. In a second clash, in Rafah on the Egyptian border, another three Palestinians lost their lives. There were no Israeli casualties.

IDF sources said that the main purpose of the action was to root out squads that have been operating freely in the area and preparing Qassam rockets and mortars to fire against Israeli targets. They denied that the IDF had decided on the action because of its opposition to the prime minister's plan to dismantle settlements in the Gaza Strip.

According to Palestinian sources, PA security forces discovered an undercover Israeli unit driving in a vehicle in Sajiyeh before 5 A.M. yesterday morning. They opened fire and in the exchange a Palestinian security guard, Muhammed Abu Armana, was killed.

As a result of the shooting Israel sent in tanks and armored vehicles, the Palestinians said. These approached the house of the Hasnin family at the end of a field in western Sajiyeh.

At this point, a gun battle broke out between the Israelis and three armed Palestinians, all members of Izzadin el-Kassam - Hasnin, Eiman Sheikh Halil and Muhammed al-Hayek. All three were killed. As rumors of the battle spread, armed Palestinians, most of them Hamas members, began streaming to the area from Sajiyeh and Jebalya, a-Shati and Sheikh Radwan. Youths and children gathered at street corners to watch. Some of them stoned the Israeli troops.

As the fighting continued, Hanni abu Sukheileh, 25, Mahdi Zidayieh, 23, and Amar al-Ghamari, 24, were killed - all Hamas members. Ikram Akilan, 25, of the Islamic Jihad was also killed. An unarmed Jihad member, Ismail Abu al-ata, 22, was also killed.

The civilians who lost their lives were Muhammed el-Ajla, 45, a truck driver, and Heitham Abed, 22, a construction worker. Both were killed on their way to work.

The son of the Fatah secretary in Gaza, 17-year-old Muhammed al-Halles, was also killed. His father said he prefered to hold a Kalshnikov rather than go to school but some bystanders said he had been unarmed.

More than 40 people are said to have been wounded during the clashes. Local radio stations kept urging civilians to leave the area. Many Gazans were infuriated that the Palestinian gunmen allowed youngsters and children to wander among them freely during the shoot-out instead of sending them home.

Colonel Yoel Strick, who commanded the Israeli forces during the battle, said many dozens of armed Palestinians had participated. He also said many of them stood firing from among the women and children who had left their homes to watch the battle.

The IDF withdrew around noon and many of the Palestinians' funerals were held in the afternoon. Shortly afterward, Palestinians fired Qassam rockets at Israeli targets. By evening, 10 rockets had fallen within the Green Line and in Gush katif. Damage was caused to one house in a settlement.

Simultaneously with the Sajiyeh action, the IDF sent troops and tanks into Rafah refugee camp. A Givati brigade special forces unit and Border Policemen carried out a search of buildings where tunnels were believed to be hidden. The troops destroyed one building and engaged in a gunbattle with armed Palestinians. During the fighting, three civilians - Muhammed Tanawi, 19, Ibrahim Zuarab, 25, and Hamad Hamadiyeh, 22, were killed.

During yesterday morning's battle in Sajayieh, Izzadin al-Kassam issued a bulletin: "This is an urgent call to all our squads in the West Bank towns, villages and refugee camps. You should urgently react and hit wherever possible with large suicide bombings inside Israel and the settlements." The bulletin added: "All avenues are open for you to take revenge for the massacre at Sajayieh."

Hamas spokesman Abdel Aziz Rantisi said: "The enemy will not get away scot free and the Israelis will pay a heavy price." He expressed the hope that the revenge actions would force Israel to withdraw not only from the Gaza Strip but also "from all conquered Palestinian territories."