Israeli and Palestinian leaders say that international terror elements have infiltrated the Palestinian territories. That could have an effect on Israeli elections later this month.

Palestinian leader Mahmoud Abbas says that the Islamic terrorist group al-Qaida is operating in the West Bank and Gaza Strip.

Interviewed in the London-based Arabic newspaper Al Hayat, Mr. Abbas said he had not expected that the group behind the September 11, 2001, attacks in the United States would succeed in establishing a foothold in the Palestinian territories. He said "the infiltration of al-Qaida can ruin the whole region."

Israeli officials said it is an ominous, but expected development, following the election of the Islamic militant group Hamas in Palestinian parliamentary elections five weeks ago.

Acting Prime Minister Ehud Olmert said, there are international terror elements that want to extend their reach into areas bordering Israel. He said Israel knows how to deal with that threat, as well as a surge in Palestinian shooting and stabbing attacks this week.

"There will be no restrictions on the military system of Israel, and all the necessary measures will be taken with an iron fist against the terrorist organizations," he said.

Israeli security officials are warning of a new wave of terror in the run-up to national elections on March 28, and that could erode the big lead held by Mr. Olmert's Kadima Party. According to a new poll, support for Kadima has dropped to its lowest point since the party was established in November. The poll shows that Kadima would win 37 seats in the 120-member Knesset, or parliament, down from a high of 44 seats a few weeks ago.

Nevertheless, Mr. Olmert's hawkish rival, former Prime Minister Benjamin Netanyahu, has failed to make a significant comeback, despite the Hamas victory and fears of terrorism. The poll shows Netanyahu's Likud Party making a slight gain, to just 15 seats in the Knesset.