Israel has staged a military raid into the West Bank town of Ramallah, sparking gunbattles with Palestinian militants there.
Witnesses say at least four Palestinians were killed and at least 20 injured.
Arabic television showed live pictures of the gunbattles and of wounded being carried away from Ramallah's central square.
Israeli troops moved into Ramallah Thursday afternoon with armored carriers and bulldozers. Witnesses say Israeli helicopters fired on buildings in the city center.
Palestinian officials say the Israelis wanted to arrest a militant from the al-Aksa Martyrs Brigade, an armed group linked to the Fatah movement of Palestinian President Mahmoud Abbas.
Israel has confirmed the raid and says it has detained four Palestinians.
Fatah official Saeb Erekat says the raid will undermine talks Thursday between Israeli Prime Minister Ehud Olmert and Egyptian President Hosni Mubarak.
The meeting in the Red Sea resort of Sharm el-Sheikh is aimed at restarting the Israeli-Palestinian peace process.
On the agenda is the fate of an Israeli soldier captured by Palestinian militants in a cross-border raid in June. The gunmen included members of the governing Islamic group Hamas.
Palestinian sources said earlier this week there was progress in talks to free the Israeli soldier in exchange for Israel's release of Palestinian prisoners.
The French news agency Agence France Presse is reporting that a senior Hamas official says the Israeli soldier is alive and that Hamas has sent an audiotape of the soldier to Israeli officials. Israel has demanded proof that the soldier is alive before a swap is carried out.
An Israeli government source said no announcement is expected at Thursday's summit on the prisoner swap.
Some information for this report was provided by AFP, AP and Reuters.