HIGHLIGHTS: Palestinians Fear Withdrawal Will Become "Gaza Only"||Ramallah up for Discussion: Peres||A Second Palestinian Killed in Tubas in the Northern West Bank||Hamas Vows Revenge||More Palestinians Detained in Gaza & Jennin|| Collaborator Gunned Down in Tulkarm||Mandela to Join 'Free Barghouti Campaingn' || STORY: Israeli Defence Minister Binyamin Ben Eliezer is due to meet with Palestinian interior minister Abdel Razaq al-Yahya to discuss the "Gaza First" withdrawal plan, Israeli public radio said.

A defence ministry spokesman Thursday refused to confirm or deny such a meeting would be held, saying only that "contacts over the plan were going to continue."

A senior Palestinian official said talks were expected to go ahead later Thursday, but that he did not know which Israeli official would be there.

The two sides met late Wednesday to discuss unblocking more Palestinian funds frozen by Israeli since the start of the uprising almost two years ago, with Israel agreeing to release another 70 million shekels (15 million dollars).

The "Gaza First" plan for a phased withdrawal from recently reoccupied areas in the Gaza Strip in exchange for a Palestinian crackdown on Resistance leaders there was first presented during a Jerusalem meeting between the two men on Aug 5.

After initially approving the plan in principle, the Palestinians later rejected it, arguing Israel had set new conditions in the meantime.

The Palestinians fear that the proposal might become "Gaza Only," with Israel taking credit for pulling back while sealing its grip on the West Bank, and want iron-clad guarantees that Israel will also withdraw from areas in the West Bank.

RAMALLAH UP FOR DISCUSSION: PERES

However, Israeli Foreign Minister Shimon Peres said Thursday that Israel had told the Palestinians that it has no problem in discussing a phased withdraw from Bethlehem along side the 'Gaza first' plan.

Speaking on Israel Radio, Peres said that his talks Wednesday with a senior Palestinian team were "to the point and constructive."

Israel pledged Wednesday night to transfer another NIS 70 million of frozen Palestinian tax revenues to the Palestinian Authority as part of its effort to ameliorate the Palestinians' standard of living in the West Bank and Gaza Strip.

Peres made the promise in a meeting with Palestinian officials, including Palestinian Minister Saeb Erekat and Finance Minister Salam Fayyad.

From the Israeli side, Peres was joined by Foreign Ministry Director-General Avi Gil, Finance Ministry Director-General Ohad Marani, and Minister Dan Naveh.

KILLING CONTINUES

Meanwhile, 9-year-old Nidal Abu Mohsen died in the town of Tubas when the army told him to go into a residence where the Jenin military chief for the Islamic movement Hamas, Nasser Jarrar, was hiding.

Entering Jarar's house, Abu Mohsen was gunned down. The occupation army accused Hamas of shooting him as he entered, but the teenager's family said Israeli bullets had killed him.

Jarrar died in the ensuing gun battle.

Abu Mohsen's uncle, Ali Daragameh, a field worker for the Israeli rights group B'Tselem, said "his nephew was taken by the soldiers and was forced to go to Jarrar's house at gunpoint," the rights group said in a statement.

The occupation army confirmed Abu Mohsen's death, saying he had been killed while trying to enter the house for the occupation army to negotiate with Jarrar, but denied Abu Mohsen had been used as a "human shield".

Israel accused Jarrar, who lost both legs and an arm last year trying to plant a roadside bomb, of planning a "mega-attack" to bring down an Israeli skyscraper.

HAMAS VOWS REVENGE

Representatives of Hamas threatened to avenge Jarrar's death Thursday.

In Gaza Thursday, Hamas spokesman Abdel Aziz Rantisi warned the death Wednesday of one of the group's leaders, Nasser Jerar, "will not pass without strong punishment."

Jarrar was considered a leader of Hamas's military wing in the Jenin area and was responsible for the planning and execution of several deadly Resistance attacks inside Israel.

About a year ago, an explosive device he was preparing blew up in his hands, as a result of which he lost both legs and one of his hands.

The disability, however, did not, reportedly, stop him from planning other attacks after he had recovered from his wounds.

INTIFADHA CONFRONTATIONS CONTINUE

Meanwhile, violence continued in the territories Wednesday, with a number of attacks on occupation army positions in the Gaza Strip, and the firing of a mortar shell at an Israeli internationally illegal settlement in Gush Katif. There were no casualties or damage.

IN OTHER CONFRONTATIONS

The occupation army continued to round up suspected Resistance activist in the Gaza Strip and West Bank.

In the West Bank, Rami Inbawasi, 25, of Tulkarm, was shot dead by three men Tuesday night near the city's hospital.

Palestinian sources said the man was suspected of collaborating with Israel and of killing a senior Hamas activist in the city.
The sources said he was kidnapped the previous night.

On Tuesday night, occupation soldiers arrested three wanted Palestinians two in Jenin and one near Ramallah.

The High Court delayed demolishing the homes of two Resistance activists. Justice Dalia Dorner ordered the delay to give the families of the activists who lived there a chance for a hearing. The court Wednesday rejected a petition submitted by a Gaza resident to ban the occupation army from demolishing his home.

The army said it plans to demolish the home of Yousuf Zarub, because his son tried to stab a policeman to death.

Border policemen Wednesday arrested a Palestinian youth at the Abu Dis checkpoint near Jerusalem who was found to be carrying two stun grenades. The suspect was held for questioning.

Palestinian sources said Thursday that occupation army special forces had arrested a senior Hamas leader.

According to an Israeli Radio report the occupation forces entered the village of Beit Awa, south of the West Bank city of Hebron, in an overnight raid and arrested the man.

No further details were immediately available.

MANDELA TO JOIN 'FREE BARGHOUTI CAMPAING'

Palestinians parliamentarians announced Thursday the formation of an international committee to work for the release of Fatah leader Marwan Baraghouti, including Former South African President and long-time political prisoner Nelson Mandela.
According to the Palestinian announcement, the committee is to include Mandela, Nobel winning Portuguese author, Jose Saramago, and prominent Palestinian-American professor Edward Sa'id.

PHOTO CAPTION

A Palestinian Resistance activist wears an explosives belt during a march of the al-Aqsa Martyrs Brigades in Gaza City August 14, 2002. REUTERS/Reinhard Krau