JERUSALEM (AP) -- An Israeli airstrike in the northern Gaza Strip killed two Palestinian militants Thursday and a Palestinian stabbing attack killed an Israeli in the West Bank in a new spasm of violence following a suicide bombing in Israel earlier this week.

Israel had promised tough retaliation for Monday's bombing that killed five people outside a shopping mall in the coastal town of Netanya, including increased arrest raids, airstrikes in Gaza and a renewal of targeted killings of Palestinian militant leaders.

On Thursday, an Israeli aircraft launched missiles at a group of militants from the Al Aqsa Martyrs' Brigades near the northern Gaza town of Jebaliya, Palestinian witnesses and health officials said.

The strike killed Iyad Nasser, 27, and Iyad Qaddas, 21, hospital officials said. Six others were wounded, including an 11-year-old girl, hospital officials said.

The army said the strike targeted a building where a senior Al Aqsa militant responsible for attacks on Israel was staying.

An angry crowd gathered at the hospital, demanding revenge.

''This crime will not pass easily and the blood of our fighters will not be spilled in vain,'' said a spokesman for Al Aqsa who goes by the nickname Abu Mohammed.

Palestinian officials condemned the attack and said Israel would bear responsibility for its consequences.

''This Israeli action is going to sabotage the efforts made by the Palestinian Authority to maintain calm and to revive the peace process,'' Interior Ministry spokesman Tawfik Abu Khoussa said.

Another airstrike Wednesday killed a militant from the small Popular Resistance Committees.

In other violence, a Palestinian stabbed an Israeli in the neck, killing him in an attack near the Qalandiya checkpoint outside the West Bank city of Ramallah, emergency workers said.

The surge in violence comes amid election campaigns for both Israel and the Palestinians. Israeli Prime Minister Ariel Sharon was expected to take a hard line against any Palestinian attacks to reassure Israeli voters of his security credentials following his secession from the hawkish Likud Party to form a new centrist party.

As part of the process leading to March 28 elections, Sharon's Cabinet became a caretaker government Thursday. The change, which took effect after the official publication Thursday of an order disbanding parliament, has little impact beyond allowing Sharon to appoint acting ministers without parliamentary approval. Parliament is set to dissolve Dec. 29.

In the wake of the recent violence, Israel suspended talks to open up a road link to ferry Palestinians between Gaza and the West Bank for the first time in nearly five years, an Israeli official said Thursday. The official spoke on condition of anonymity because he was not authorized to discuss such matters with the media.

The ''safe-passage'' agreement was included in a deal hammered out by Secretary of State Condoleezza Rice last month that was intended to help rejuvenate Gaza in the wake of Israel's September withdrawal from the territory. The suspension of talks signaled a cooling in relations between Israel and the government of Palestinian leader Mahmoud Abbas.

Palestinian negotiator Saeb Erekat said the freezing of talks on implementing the road link, which was to have opened Dec. 15, was a ''flagrant violation'' of the agreement Rice brokered.

''I wonder why would the Israelis do such a thing? We condemned the Netanya attack. What's the linkage between that and the Gaza convoy? That mentality makes no sense,'' Erekat said.

Abbas, who previously resisted U.S. and Israeli calls to crack down on militants, ordered his security forces to arrest those responsible for the Netanya bombing.

Since Monday, Palestinian forces arrested between 80 and 100 members of Islamic Jihad -- the group responsible for the bombing -- across the West Bank, Islamic Jihad officials said Thursday. Israel has demanded far tougher action, calling for the group to be dismantled altogether.

The opening of the safe passage was expected to improve Palestinians' quality of life by connecting Gaza and the West Bank for the first time in nearly five years. The safe passage arrangement had been in effect for a year before being canceled after violence erupted in late 2000.

Alvaro de Soto, the U.N. Mideast envoy, said the agreement brokered by Rice was supposed to be implemented on schedule, regardless of violent attacks.

''(I) hope that the suspension (of talks) is only a temporary hiccup and that the talks will resume soon,'' he said.

Before the talks can resume, the Palestinian Authority must clamp down on militant groups, especially Islamic Jihad, said Raanan Gissin, a spokesman for Sharon. Israel doesn't want militants to use the passage -- which would cut across Israeli territory -- to carry out attacks, Gissin said.

''Safe passage means that it has to be safe for both sides,'' he said.

Israel also arrested 23 wanted Palestinians in the West Bank overnight as part of its stepped-up arrest raids, the army said. Troops captured 20 members of the militant Hamas group in the village of Beit Laqiya, near the city of Ramallah, and three Palestinians in other areas, the army said Thursday.

Palestinians in Gaza fired rockets and mortar shells toward Israel overnight, causing no injuries or damage, Israel media reported. The army said one rocket fell near the Erez crossing between Israel and Gaza and another in Israel's nearby Negev Desert.

In response, the army fired dozens of tank shells and artillery rounds into northern Gaza, Palestinian security officials said. There were no reports of injuries.