Hamas missile strikes Israeli vehicle in Gaza

GAZA, May 19 (Reuters) A rocket-propelled grenade fired by Hamas militants struck an Israeli army bulldozer inside the Gaza Strip today, Hamas said, as Israel launched new air strikes against the militant group, killing two Palestinians.

It was not immediately clear whether there were any Israeli casualties in the attack, the first by Hamas on Israeli soldiers who have taken up positions just inside Gaza's northern border with the Jewish state.

Israel launched a wave of air strikes against Hamas targets starting on Wednesday and Israeli officials said they were considering a broader strategy to stop militants from firing rockets at Israeli towns. Israel's security cabinet will meet tomorrow.

The air strikes have plunged the Palestinians deeper into turmoil after nine days of fierce internal fighting verging on civil war between ruling Hamas Islamists and President Mahmoud Abbas's secular Fatah faction.

Hamas and Fatah negotiators agreed in Egyptian-brokered talks to a new ceasefire starting at 1730 GMT today, though it was unclear whether the deal would hold.

''It would be a stigma if internal violence continued amid such Israeli aggression,'' Fatah leader Tawfiq Abu Khoussa said.

But minutes after the ceasefire talks concluded, the convoy of one of the Fatah negotiators came under attack from unidentified Palestinian gunmen. Mohammad al-Masri, a top Abbas intelligence official, was unharmed.

Israeli Defence Minister Amir Peretz said Israel had many options to try to prevent Gaza militants from firing rockets into Israel, playing down the immediate prospect of a massive ground invasion.

But Peretz added: ''I think the idea of taking over Gaza again is a decision that can be made at any time.'' The Israeli army said an air strike today hit three militants who had fired rockets into Israel from northern Gaza.

Local residents said two civilians, both shepherds, were killed and another four people were wounded.

A barrage of makeshift rockets fired from Gaza into southern Israel today caused damage but no injuries.

Israel's bombing campaign against Hamas has killed at least 17 Palestinians since Wednesday. Local residents said the dead included at least five civilians.

At least 49 Palestinians have been killed in the last nine days of internal fighting between Hamas and Fatah.

REUTERS GT KP2035