A Palestinian inspects the bomb damaged United Nations Club in Gaza City

It was a violent New Years in the Gaza Strip, where Palestinian gunmen attacked a U.N. building and carried out another kidnapping. The deteriorating security situation is causing deep concern in both the Palestinian Authority and Israel.

Masked Palestinian gunmen stormed into a club for U.N. workers in Gaza City, and blew it up. The blast shattered windows and ripped off the roof, but the building was empty and no one was hurt. Police say the club was attacked because it is the only place in conservative Muslim Gaza that serves alcohol.

The United Nations plays a vital role in assisting Palestinian refugees, but most foreign personnel have left Gaza because of a wave of violent protests and armed kidnappings.

In the latest incident, gunmen stopped a minibus carrying foreigners, and seized an Italian hostage. He was released a short time later. Last week, three British citizens were kidnapped and released after three days in captivity.

Gaza has been plunging deeper into lawlessness since Israel pulled out in September. In a New Year's message, Palestinian leader Mahmoud Abbas vowed to restore law and order.

But Palestinian human rights activist Bassam Eid says Mr. Abbas has done nothing to impose the rule of law.

"And without taking any measures toward a suitable security in Gaza, Gaza will remain as a chaos, as it is today," he said.

That chaos has Israeli officials worried.

"We are certainly anxious to encourage the Palestinian Authority to take charge," says Deputy Prime Minister Ehud Olmert.

Israel fears that the chaotic situation is strengthening the Islamic militant group Hamas, which seeks the destruction of the Jewish state. Hamas is capitalizing on the disarray in the Palestinian Authority and is posing a strong challenge to Mr. Abbas and his ruling Fatah party in parliamentary elections set for January 25. Fatah officials are so concerned about a Hamas victory, that they are urging Mr. Abbas to postpone the elections.