Israeli troops have arrested the man they say orchestrated the attack Sunday on an Israeli communal farm. The man is a leader in a group on the State Department list of terrorist organizations.
Israel radio says Mohammed Naife, a senior member of the Al Aqsa Martyr's Brigade, surrendered after a standoff of several hours.
Earlier this week, Israeli troops demolished the Naife family home. They say he planned the attack in which five Israelis were killed Sunday on Kibbutz Metzer.
Elsewhere, dozens of Israeli tanks backed by helicopter gunships carried out a pre-dawn incursion into central Gaza City. Three Palestinians were wounded in the two-hour raid. Four men the Israelis say were making mortar shells used to attack Jewish settlers were arrested. Two of the four were reported to be Palestinian security officers.
There were also operations in the West Bank towns of Tulkarem and Nablus where a dusk-to-dawn curfew remains in effect. A 17-year-old Palestinian was reported killed in Nablus when troops fired on a large crowd of youths throwing stones at their armored vehicles.
The army said it had been planning the Nablus operation for weeks in response to what officials said was an increase in attacks launched from bases in the city. Israeli Defense Minister Shaul Mofaz said Wednesday that the operation is "not limited" in time.
A Palestinian man said his two-year-old son was killed when an Israeli tank fired into his Gaza home on Wednesday. The man said the boy's mother was wounded in the shooting. The Israeli army said its troops returned fire with small arms after they had come under attack during a patrol on the Gaza border.
In political developments, Israeli Prime Minister Ariel Sharon said he believes a Palestinian state will become a reality if terror attacks end. In an interview Wednesday, he told Israeli television that he promised the United States that he would not expel Palestinian leader Yasser Arafat. The expulsion has been demanded by several hardliners in his cabinet, including Foreign Minister Benjamin Netanyahu.