Israeli troops staged a rare incursion into this city yesterday, bulldozing cars and vegetable stands near the central square as they engaged gunmen and stone-throwing residents in a chaotic two-hour battle that left four Palestinian Arabs dead.

The raid, aimed at rescuing a team of undercover Israeli agents, was a diplomatic embarrassment for Prime Minister Olmert of Israel as he headed to Egypt for talks with President Mubarak on how to revive peace negotiations between Israel and the Palestinian Arabs.

And it contributed to one of the bloodiest days in weeks for the Palestinian Arabs, who also counted six deaths in factional fighting in the Gaza Strip. The dead included a senior security officer of the Fatah movement killed during a dramatic day-long siege of his house by a Hamas paramilitary force.

At a testy news conference in the Egyptian resort of Sharm el-Sheik, with Mr. Olmert at his side, Mr. Mubarak said he had used their meeting to express "indignation" over the Israeli raid and to demand that Israel and the Palestinian Arabs "refrain from all practices that would put obstacles in the road to peace."

Mr. Olmert said: "I am sorry if innocent people were hurt." He said the raid had been meant to protect Israel from terrorist attacks but "things developed in a way that could not have been foreseen."

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