Two Israelis were killed and 16 others injured when two terrorists infiltrated the northern Gaza Strip settlement of Alei Sinai and opened fire indiscriminately. The terrorists barricaded themselves in a house, holding off IDF troops for some three hours with gunfire and grenades. After it was ascertained that no residents were being held hostage, IDF snipers killed the infiltrators.

Israel's security cabinet met late into the night and removed a number of restrictions on IDF preventive and retaliatory measures. Despite an official statement by Arafat strongly condemning the attack, no arrests or other activities have so far been made. The cabinet held the Palestinian Authority responsible for not preventing the attack. Overnight and in the early morning IDF land forces destroyed a number of Palestinian security structures in the Gaza Strip, in the latest sign that last week's cease-fire declaration is in tatters. At least 6 Palestinians were reported killed in the IDF action.

The terrorist infiltration began shortly after 7:30 p.m. Tuesday night when two terrorists broke through Alei Sinai's southeastern electric perimeter fence. The terrorists were reportedly wearing camouflage uniforms, high rubber boots and green bandanas sporting slogans of the Hamas organization. The men were armed with Kalashnikov rifles, numerous ammunition cartridges and grenades.

Immediately after penetrating into the settlement, the terrorists shot and killed Liron Harpaz, an 18-year-old off-duty soldier who was a resident of Alei Sinai, and Asaf Yitzhaki, her 20-year-old boyfriend from Lod. The terrorists continued to race along the main road of the community, shooting and throwing grenades at pedestrians and at the windows of nearby houses. In the course of the infiltration seven civilians were injured, including an infant.

"I didn't understand what was happening," said Arik Harpaz, father of Liron, remembering the first moments of the attack. "I didn't realize that Liron and her boyfriend, Asaf, had gone for a walk… Afterwards a member of the community called me and said there was gunfire and many people had been injured. He told me to grab my first aid kit and run to help."

As security forces began to arrive on the scene, residents were asked to remain in their houses, lock doors and windows and turn off their lights. Reports called into the media by members of the community told of gun battles, missing neighbors and conflicting numbers of terrorists. It was unclear where the terrorists had barricaded themselves, and whether they were holding hostages or not.

"There were plenty of rumors," said Avi Farhan, one of the founders of Alei Sinai. "I began calling up members, asking if they were okay. Some of them didn't answer, or perhaps didn't hear the phone. Maybe they were not home, or had been injured," he said.

IDF forces initiated gun battles with the terrorists, who barricaded themselves inside the yard of an empty house. During gunfire exchanges a number of soldiers were injured, including Lt. Dudu Cohen, commander of the Givati's Orev battalion, who sustained serious injuries. Ambulances and helicopters transported the wounded to Ashkelon Brasilia Hospital and one seriously wounded patient was sent to Soroka Hospital in Beer Sheva.

Elite soldiers from the anti-terrorist Yamam squad arrived on the scene. The area around the terrorists was closed off, and commanders assumed the terrorists planned to negotiate for safe passage out of the community. Chief of Staff Lt.-Gen. Shaul Mofaz and Southern Region Commander Gen. Doron Almog were on the scene directing operations. IAF helicopters hovered overhead and flares lit up the night.

After determining that the terrorists were holding no hostages, IDF snipers spotted the two terrorists and shot and killed them. It was thought that a third terrorist was still inside the house, and Yamam soldiers blasted their way into the house to discover that it was empty. Even so, media reports indicated that footprints leading up to the settlement fence suggested that other terrorists had aided in the infiltration efforts.

Prime Minister Ariel Sharon told the International Christian Embassy's 22nd "Feast of Tabernacles" in Jerusalem last night that Israel is "in a war here. We are facing a very heavy war and struggle. We are facing Arab and Palestinian attacks," he said, adding that Israel would not risk its citizens' lives to appease Arab countries in order that they could join the anti-terror coalition led by the United States.

Sharon also demanded that the world declare Hamas, Islamic Jihad and the Hizbullah terrorist organizations and treat them accordingly.

The security cabinet met late into the night to discuss Israel's reaction to the terrorist attack and to determine the fate of the cease-fire agreement signed by Foreign Affairs Minister Shimon Peres and Palestinian Authority Chairman Yasser Arafat last week.

The Palestinian leadership issued a statement condemning the Alei Sinai attack as "a violation of the cease-fire." The PA declared that it had "taken the necessary measures to honor and implement the cease-fire and to put a decisive and expeditious end to any violation of the cease-fire from [its] side."

A statement released by the cabinet held the "Palestinian Authority and its Chairman… responsible for preventing attacks perpetrated by terrorists operating out of, and leaving from, PA territory." The cabinet promised that the "IDF would take all necessary measures to protect Israel and Israeli citizens."

IDF given green light to preventive self-defense policy
According to media reports, the IDF has been given a green light to return to a policy of "preventive self-defense," which would enable the army to strike directly at suspected terrorist leaders. Cabinet secretary Gideon Sa'ar told Army Radio this morning that the past few days did not constitute a cease-fire. "We, of course, prefer that the Palestinian Authority work to prevent terror emanating from its own territory... But if it won't do so, we - our security forces - need to do this," he said.

Defense Minister Binyamin Ben-Eliezer promised that the IDF would undertake any "action to improve the safeguarding of residents of Judea, Samaria and the Gaza Strip."

Overnight Israeli tanks and heavy engineering units struck at PA security positions in the Gaza Strip, including those around the Jabaliya refugee camp. A number of police positions in the Erez block near Alei Sinai were destroyed, and Israeli land forces were reported advancing as much as a kilometer into Palestinian-controlled territories. A naval blockade was imposed off the coast of the Gaza Strip.

Media reports indicated that at least five Palestinians were killed in the attacks, and several more were wounded, including a 4-year-old boy.

IDF Gaza division commander Brig.-Gen. Yisrael Ziv told Army Radio that the IDF operation was intended to clear the territory from which the terrorists were able to enter Alei Sinai. "This attack is not meant at this time to incur [Palestinian] casualties," he said. "Its intended target is to improve the defense of the northern region's settlements."

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