Military

DATE=7/25/2002

TYPE=CORRESPONDENT REPORT

TITLE=ISRAEL / PALESTINIANS (L)

NUMBER=2-292395

BYLINE=LARRY JAMES

DATELINE=JERUSALEM

CONTENT=

VOICED AT:

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INTRO: Israel says it will release about 43 million dollars in Palestinian tax revenues and take additional measures to ease conditions for Palestinians living under an Israeli curfew in the West Bank. Larry James reports from Jerusalem on a move that comes amid increasing tension following an Israeli air strike in the Gaza Strip that killed 15 people, including nine children.

TEXT: Foreign Minister Shimon Peres told Israel Army Radio that Israel is making every effort to ease tensions that followed the Gaza strike.

He said the situation has seriously escalated and he said he fears innocent people on both sides will pay a high price.

Israeli troops occupy seven of the eight major population centers in the West Bank. The areas are under a tight curfew, travel is restricted and more than a hundred thousand Palestinians there are unable to go to their jobs in Israel.

Security intensified dramatically in Jerusalem on Thursday with an increased Israeli military presence and new checkpoints set up between the mainly Arab East Jerusalem and the predominantly Jewish western part of the city.

The Palestinian militant group Hamas has vowed to avenge the Israeli air strike that killed the commander of its military wing.

The attack in Gaza City late Monday night flattened the house of Hamas military chief Salah Shehade, killing him, and 14 others including nine children.

Israeli radio quoted military sources as saying they are expecting Hamas to attempt a series of attacks in the next couple of days. They say they believe the attacks could include the possibility of a car bombing or other major blast aimed at creating maximum damage.

The American embassy has issued a statement warning its citizens to take the threat seriously during what it called this period of heightened tension.

Elsewhere, one Israeli was killed and another seriously wounded in a shooting attack in the West Bank early Thursday. The military said the victims were in a car that came under attack near a Jewish settlement south of the Palestinian town of Qalqilya. (Signed)

NEB/LDJ/KL