The commander of an elite undercover Israeli commando unit has been killed in the West Bank, in what is considered to be a devastating blow to the Israeli army.

The commander of the elite Israeli Dudevan unit Lieutenant Colonel Eyal Weiss was killed during an operation in the West Bank village of Saida.

He was killed when a wall of a building collapsed during the raid.

He was 34 years old and considered an outstanding officer who had been decorated for bravery in the field.

One member of the Islamic Jihad was also killed during an exchange of fire during the operation, which the Israeli army said was to capture "wanted terrorists." Some 15 Palestinian militants were arrested and a house was demolished.

The Israeli raid came just hours after Palestinians used a powerful roadside bomb in the Gaza Strip to penetrate the armor of an Israeli tank, ripping the vehicle apart and killing three soldiers.

Meanwhile, in the West Bank city of Ramallah, hundreds of angry Palestinians demonstrated and threw rocks at the office of Palestinian leader Yasser Arafat.

The Palestinians were demanding the release of prisoners held in Palestinian jails.

The protest came ahead of talks between visiting German Foreign Minister, Joschka Fischer and Mr. Arafat.

Earlier Mr. Fischer met with his Israeli counterpart, Shimon Peres, who said violence is seriously undermining Mr. Arafat's authority.

"I think that all the groups who are taking the initiative to continue terrorism and to extend it are endangering the position of Arafat because Arafat may look more and more not like a Palestinian address but a Palestinian symbol. He has really to establish his authority," Mr. Peres said.

The top Palestinian official in Jerusalem, Sari Nusseibeh says a top level dialogue and the resumption of formal negotiations between Israel and the Palestinians is urgently needed to halt the violence that has raged between the sides for nearly 17 months.

Mr. Nusseibeh has said that one telephone call from Israeli Prime Minister, Ariel Sharon, could change the entire situation.

"I think that the tragedy that exists is of our own making and therefore it is we - the people on both sides - that can undo it and it create a change. We can do it. And I think the best way and the most direct way for us to begin doing it is to have the Israeli government, led by Mr. Sharon, picking up the telephone talking to Mr. Arafat and asking him once again to start negotiations. I think the world will change the following morning," he said.

The prospects of this happening, however, seem remote after Mr. Sharon's Cabinet in December declared Mr. Arafat "irrelevant" and said it would have no more direct dealings with him until Palestinian attacks against Israelis have been brought to a complete halt.