Israel has suspended its withdrawal from Palestinian-controlled towns. The postponement followed fierce fighting in the West Bank, Saturday, which left one Palestinian dead.

Israel has postponed indefinitely its withdrawal from the Palestinian controlled towns of Bethlehem and Beit Jala.

An Israeli government spokesman says, the decision followed ongoing violence in the West Bank when Palestinian gunmen opened fire on Israeli targets.

Fierce clashes broke out between Israeli forces and Palestinian gunmen in Bethlehem and near the West Bank city of Nablus, also under full Palestinian control. Hospital officials say an activist from Palestinian leader Yasser Arafat's Fatah faction was killed in a gun battle after Israeli tanks entered the West Bank town of Tulkarem.

The Israeli army says shots were fired at Gilo, a disputed Jewish neighborhood on the outskirts of Jerusalem, annexed by Israel after the 1967 Middle East war.

Dozens of Palestinians have been killed since Israel moved its forces into six areas under full Palestinian control last week. Israel says it has rounded up more than 40 militants since the operation began.

The incursions into the West Bank territory followed the assassination by Palestinian militants of a right-wing Israeli cabinet minister, Rehavam Ze'evi earlier this month.

Israel is demanding that the Palestinians enforce a full cease-fire and arrest militants before they withdraw their forces.

It is unclear how long Israel will continue its reoccupation of Palestinian territories, despite international criticism.

Palestinian and Israeli security commanders had met to coordinate plans for a withdrawal, meant to be the first phase of an Israeli pullout. The Israeli spokesman says, Israel will, quote "re-examine its decision if Palestinians keep the calm and security."

Palestinian officials have condemned the Israeli decision.

Earlier, Palestinian information minister Yasser Abed Rabbo said there will be, in his words, "no cease-fire" unless Israel removes its forces.