Israeli troops killed five Palestinians in a West Bank raid and Palestinian militants fired a rocket into Israel yesterday, rattling a ceasefire and hopes raised by a removal of Jewish settlers from occupied land.

The flare-up, which included the fatal stabbing of a British Jew by a Palestinian in Jerusalem on Wednesday, was the first since Israel finished scrapping all 21 settlements in Gaza and four of 120 in the West Bank on Tuesday.

A new surge of violence would jeopardise a truce that largely held as Israeli Prime Minister Ariel Sharon carried out his ?Disengagement Plan? and make it harder to capitalise on the pullout by reviving Middle East peacemaking.

Troops who raided Tulkarm refugee camp in the West Bank overnight killed five militants in a gunbattle after they resisted arrest for suspected involvement in two suicide bombings in Israel this year, the Israeli army said.

Palestinian witnesses said three of the dead were unarmed teenagers and two were militants, one from the al-Aqsa Martyrs Brigades, an armed group in Palestinian President Mahmoud Abbas?s Fatah movement, and the other from Islamic Jihad.

?The enemy should prepare coffins because we will respond quickly and decisively in the depths of the Zionist entity,? Islamic Jihad said in a statement issued in Gaza City.

Shortly afterwards, a rocket fired from north Gaza crashed near the Israeli town of Sderot, causing no damage or injuries, in an attack claimed by the Popular Resistance Committees, made up primarily of former Fatah members.

Israel has threatened to hit back ?harder than ever before? for any attacks emanating from Gaza after settlers were out. Palestinian President Mahmoud Abbas condemned the raid as counterproductive to peace efforts. He accused Israel of trying to ?renew a cycle of violence? to dodge talks based on a peace ?road map? to Palestinian statehood in the West Bank and Gaza.

?I call on Palestinians not to respond to provocations by Israel so as not to give it a pretext to escalate its aggression ... and avoid implementation of commitments under the road map,? he said in a statement.

Palestinians are concerned about Sharon?s view that Israel for strategic reasons must keep its largest West Bank settlements where over 200,000 Jews live. Palestinians fear this will cost them the heartland of their desired viable state.

A Palestinian stabbed to death a 22-year-old ultra-Orthodox British Jew named as Shmuel Mott and wounded a friend in Jerusalem?s walled Old City. Police said the attack was motivated by nationalism and the assailant was being sought.

Muin SHADID