Israeli air strike kills 2 militants in Gaza

GAZA, May 30 (Reuters) Israel killed two Hamas militants in an air strike on the Gaza Strip today and the Islamist group's leader said the conflict may be heading towards ''an explosion''.

In the occupied West Bank, Israeli forces detained the mayor of a small town near Nablus as part of a crackdown on Hamas politicians in the territory. Dozens of Hamas officials have been seized since last week.

The violence cast further doubt on the ability of Palestinian President Mahmoud Abbas of Fatah to broker a renewed truce between militants and Israel.

Israel is trying to stop cross-border rocket attacks by militants. Abbas will meet Israeli Prime Minister Ehud Olmert next week.

An Israeli military spokeswoman said the air force targeted ''a group of armed terrorists'' near Jabalya refugee camp in the northern part of the Gaza Strip.

In addition to the two members of Hamas's Izz el-Deen al-Qassam Brigades killed in the air strike, several people were wounded and a house was damaged, ambulance crews said.

At a news conference on Tuesday, Abbas proposed a new truce and said he would meet Olmert on June 7, keeping alive a US-backed dialogue.

Israel has brushed aside calls for a truce. ''We have no intention of reaching any kind of settlement, neither with Hamas nor with Islamic Jihad. We will hit them and continue to hit them,'' Olmert said.

MILITANT GROUPS Hamas and other militant groups have fired more than 270 rockets from Gaza, killing two Israelis, over the past two weeks. Israel has hit back mainly with air strikes, killing more than 40 Palestinians, most of them fighters.

''Under occupation people don't ask whether their means are effective in hurting the enemy,'' Hamas leader-in-exile Khaled Meshaal told the Guardian newspaper.

''The Palestinians are steadfast and there are many ways of resisting according to opportunities and conditions.

''Now the international community is trying to undermine Hamas. That will lead to an explosion that will be in the face of the Israeli occupation. The damage will affect the stability of the entire region.'' Meshaal was apparently referring to crippling Western sanctions imposed on the Hamas-led Palestinian Authority to pressure Hamas to recognise Israel, renounce violence and abide by interim peace deals.

Abbas heads the Fatah movement that formed a unity government with Hamas two months ago and has proposed a truce that would initially cover Gaza and be extended within a month to the West Bank.

Hamas has said any ceasefire must include an end to Israeli raids in the West Bank.

Abbas last met the Israeli leader on April 15 as part of US-brokered talks that were supposed to take place every two weeks.

The dialogue, which has focused on aspects of a future Palestinian state, has been delayed by internal Palestinian violence, Israeli-Palestinian fighting and Olmert's uncertain political future following an inquiry critical of his handling of last year's costly Lebanon war.

Olmert's office said Abbas and Olmert would not discuss final status issues like the future of Jerusalem, Palestinian refugees and the borders of a Palestinian state.

REUTERS LAB HT1500