An Israeli raid in the northern Gaza Strip, early Wednesday, has left four Palestinians dead and 13 others wounded. The Israeli military says a fierce fire fight erupted as their forces moved into the Shajaiyeh neighborhood of Gaza City, in an operation aimed at arresting those militants responsible for recent rocket attacks on Jewish settlements in Gaza.

One of the dead was identified as a Palestinian policeman. Another was a member of the Palestinian militant group Hamas.

In a separate action at the other end of the Gaza Strip, Israeli troops in tanks and armored bulldozers moved into the Rafah refugee camp, searching for tunnels used by militants to smuggle weapons across the border from Egypt. Three Palestinians were reported injured in the ensuing clash.

Tuesday, Israel's chief of military intelligence warned that Prime Minister Ariel Sharon's plan to remove Jewish settlements from Gaza could encourage terrorism. Major General Aharon Ze'evi Farkash testified before the foreign affairs and defense committee of the Israeli parliament that terrorist groups would see the pull out as a victory that would motivate them to carry out further attacks on Israel. He predicted the evacuation would be a catalyst for terrorist groups to increase attacks against West Bank settlements.

Prime Minister Sharon has said he would take unilateral steps, if the internationally backed peace plan known as the "road map" remains stalled. One of the steps includes the imposition of what Israeli officials are calling a temporary boundary between Israel and Palestinian areas. The boundary would be established by the barrier Israel is currently constructing along the West Bank. Israel says this barrier -- a complex of walls, barbed wire and electronic sensors -- is a defense from suicide bombers. Palestinians say the barrier, which cuts deep into Palestinian territory, is a land grab aimed at preventing the creation of a viable state.

The Sharon disengagement plan calls for the removal of 17 of the 20 settlements in the Gaza Strip. Israeli Defense Minister Shaul Mofaz says Israeli troops will occupy the Gush Katif block of settlements, as a base of operations against Palestinian militants in Gaza. He told the Ha'aretz newspaper on Wednesday the troop presence could be used as a "bargaining chip" in future negotiations with the Palestinians.

Recent polls show the majority of Israelis favor a unilateral withdrawal of Jewish settlements from Gaza but pro-settlement political parties warn the Sharon government would fall, if the prime minister goes ahead with the plan. Leaders of the National Religious Party and the National Union -- two of four parties in the ruling coalition -- say they would not be part of a government that approved the settlement removal.

If the two parties pulled out of the government, Prime Minister Sharon would lose his parliament majority.