HIGHLIGHTS: Escalating the Military Situation, Israel Aims to Avoid Sitting at the Negotiating Table: Shaath||A Second Aqsa Resistance Leader Manages to Avoid Fatal Missile Impact||Hours After Targeted Killing, Resistance Man Attacks Internationally Illegal Settlement Seriously Wounding a Couple Before Getting Killed Himself||Futile, Hypnotizing U.S. Peace Efforts Continue, with Both Washington & Tel Aviv Voicing 'Regret' at Innocent Deaths|| STORY: An Israeli helicopter strike which killed two children, two teenagers and a Palestinian militant shook U.S. efforts toward bringing 23 months of violence to an end.

Two Apache gunships attacked at Tubas village near the West Bank city of Jenin on Saturday, one of their missiles destroying a car carrying a Palestinian Resistance activist and two 15-year-old boys traveling with him.

A second missile hit a nearby house, killing a boy, 9, and a girl, 10, and wounding seven others.

Fresh from what he termed a "fruitful" meeting with U.S. Deputy of State David Satterfield on Palestinian security reform, Palestinian Minister of Planning and International Cooperation Nabil Shaath denounced the attack as a "crime."

"It is a repetition of previous assassination crimes conducted by Israel aimed at escalating the military situation to avoid sitting at the negotiating table," Shaath told Reuters.

According to Israeli security sources, a second activist from the al-Aqsa Martyrs Brigades group leaped from the car before the missile's fatal impact.

Hours after the Tubas strike, a Palestinian Resistance man from the Popular Front for the Liberation of Palestine raided Har Bracha settlement near the West Bank city of Nablus, wounding a married couple before being shot dead by a soldier.

FUTILE, HYPNOTIZING U.S. PEACE EFFORTS CONTINUE

Satterfield is reported to be trying to bring Palestinians and the United States closer to implementing security reforms regarded as crucial by Israel and Washington to reviving political talks on a Palestinian state and a truce.

A U.S. embassy spokesman voiced regret at the innocent deaths in Tubas, but said Satterfield's mission would continue.

Earlier, Palestinian Interior Minister Abdel Razzak al-Yahya said there was "positive feedback" from the U.S. envoy on sending experts and equipment to restructure security services, aid first broached by Palestinian leader Arafat in August.

The latest talks also aim to strengthen a fragile security deal that Israelis and Palestinians struck last month, whereby Israel is to ease its military clampdown in the West Bank and Gaza in return for Palestinian security forces ensuring calm.

Palestinians accuse Israel of abandoning the "Gaza-Bethlehem First" arrangement that has frayed as violence persists. Israel says Palestinian police have not yet cracked down on Resistance activists.

On a different diplomatic front, European Union foreign ministers on Saturday endorsed a Middle East peace plan envisaging the creation of an independent Palestinian state in June 2005, with the consent of Israel and moderate Arab states.

The plan would also require a restructured Palestinian security service, as well as Israel's gradual withdrawal from reoccupied Palestinian self-rule areas.

PHOTO CAPTION

Palestinians look at a car destroyed by Israeli helicopters in the West Bank town of Tubas, near Jenin, August 31, 2002. Palestinian witnesses said two Apache helicopters struck at Tubas village, one missile obliterating the car, killing its three passengers and two children nearby. (Tim Russo/Reuter