A Palestinian man was killed and two wounded by the Israeli military Wednesday in the West Bank and troops swept into a Palestinian village arresting at least 18 people.

A gunfight erupted near the West Bank town of Jenin when the Israeli military says Palestinian militants opened fire on troops near a Jewish settlement.

In pursuit of the gunmen, Israeli tanks drove hundreds of meters into Jenin, which is under Palestinian control, and surrounded a house where the militants had sought refuge.

Tank shells were fired at the building and persistent gun battles were reported at the scene.

Earlier, Palestinians say Israeli soldiers moved into the village of Azzoun, near the town of Qalqilya, arresting people including policemen and activists in President Yasser Arafat's Fatah movement.

The troops, under cover of darkness, imposed a curfew and conducted house-to-house searches before withdrawing a few hours later.

The village of Azzoun, which is near a cluster of settlements in the West Bank, is under Palestinian administrative control, but security is directed by the Israeli military.

Despite the violence, Israeli and Palestinian security commanders met in an effort to strengthen a tentative truce.

Palestinians say the two sides agreed to the rebuilding of the landing strip at the Gaza International Airport that was destroyed by Israel and extending hours at the crossing between Gaza and Egypt.

The army announced it is lifting the blockade of the ancient West Bank town of Jericho.

The move means Palestinians will be able to enter and leave Jericho, unlike other population centers that remain surrounded by Israeli troops.

Israel says the closures are necessary to prevent attacks by terrorists, while Palestinians charge the travel restrictions are collective punishment that have crippled the economy.

Jericho, which is in the Jordan Valley, is isolated from other Palestinian centers and has been generally peaceful in recent weeks.

Earlier this month, under intense international pressure, Mr. Arafat called for an end to attacks on Israelis and ordered the arrests of Palestinian militants after a wave of deadly suicide bombings.

Israel has accused the Palestinian leader of not doing enough to crack down on groups involved in 15 months of violence that have left more than 1000 people, mostly Palestinians dead.