HIGHLIGHTS: One of Two Assailants Killed; Another Escaped||Israel's Futile Rolling Raids Continue with Incursions reported in Tulkaram, Jenin & Jabaa||Arab World Now Understands the Need to be Involved in Pushing Peace, Says Bush||Mubarak Defends Arafat Against Accusations Made by Bush & Sharon|| STORY: Palestinian Resistance men infiltrated a Jewish settlement in the West Bank and killed three Israelis early on Saturday before armed settlers shot dead one of the attackers, the Israeli army said.

The assault on the Karmei Tzur settlement near the divided city of Hebron dealt another blow to peace hopes just ahead of a visit to Washington by Israeli Prime Minister Ariel Sharon and hours after a fresh series of Israeli military raids on West Bank towns.

The two Resistance men slipped into the settlement before dawn and opened fire on a cluster of trailer homes just inside a perimeter fence, an army spokeswoman said.

Two other settlers were seriously wounded and two were lightly injured.

There was no immediate claim of responsibility. Jewish settlements illegally built on occupied Palestinian land have been frequent targets of Palestinian militants during a 20-month-old uprising against Israeli occupation.

Palestinians see settlers as part of an army usurping Arab lands. (Read photo caption)

ISRAELI INCURSIONS CONTINUE

Israeli officials say the almost daily incursions into Palestinian-ruled territory are aimed at preventing attacks like the one carried out at Karmei Tsur, but Palestinian officials accuse Israel of stoking more violence.

Palestinian witnesses and security officials said tanks and troop carriers raided Tulkarm, Jenin and Jabaa on Friday, imposing a curfew on the Palestinian-ruled towns and arresting several local people, including a woman.

The Israeli army said it had a woman in custody who had plotted to carry out a bombing, a weapon Palestinian militants have used frequently, most recently on Wednesday.

The Israeli incursions, in which witnesses said at least seven Palestinians were wounded, came after a Jenin militant rammed a car bomb into a bus in northern Israel on Wednesday, killing 13 occupation soldiers and four civilians.

BUSH TO MAKE A STATEMENT

In Washington, President Bush said he would make a statement about his Middle East policy after meeting Sharon, adding that there had been "progress" in the latest round of international diplomacy aimed at halting 20 months of conflict.

Sharon, who delayed his departure for Washington by one day until Saturday to deal with the response to the bombing, will meet the U.S. president at the White House on Monday -- their sixth meeting since Sharon took office in March 2001.

Bush has yet to host Arafat.

On Friday, the U.S. president again voiced disappointment at Arafat's handling of militant violence. "He needs to cut off terrorist activities," Bush said.

The United States, Israel's guardian ally, is keen to contain the Israeli-Palestinian conflict and rally support for its war on terror, possibly including an assault on Iraq.

Speaking to reporters in Washington, Bush struck a positive note. "Progress is being made. The Arab world now

understands the need to be involved in pushing peace, and fighting against the terrorist actions that make it very difficult to achieve peace," he said.

MUBARAK DEFENDS ARAFAT

Egyptian President Hosni Mubarak began two days of talks with U.S. officials in Washington on Friday, meeting Secretary of State Colin Powell. He was also due to hold two rounds of talks with Bush.

Mubarak called on Washington to take the lead in seeking a rapid resolution of the Israeli-Palestinian conflict and is pressing for the declaration of a Palestinian state before negotiations on its final borders.

Bush said that after meeting Mubarak and Sharon he would "talk to our country about how I think we should go forward."

Reiterating his proposal that a Palestinian state be declared before negotiations on final borders, Mubarak defended Arafat against accusations by Bush and Sharon that he was not doing enough to rein in militants.

"Look, nobody can guarantee there will be no more suicide bombings until there are two states living beside each other according to the statement given by the president (Bush)," Mubarak said in a CNN interview.

"How could he (Arafat) control this kind of violence? To control it 100 percent is impossible...He has no police, no intelligence, nothing to use against these people," he said.

PHOTO CAPTION

Israeli occupation soldiers patrol in front of and investigate a mobile home after an attack by Palestinian Resistance men in the Jewish settlement of Karmei Tsur, in the West Bank, Saturday, June 8, 2002. Two Palestinian Resistance men fired at mobile homes in a Jewish settlement in the West Bank before dawn Saturday, killing three Israelis. (AP Photo/ZOOM 77)