Israel has frozen talks over the plans to allow road passage between Gaza and the West Bank amid fresh strains on the de-facto ceasefire in the wake of the suicide bombing that killed five Israelis on Monday.
Two Palestinian militants from the al-Aqsa Martyrs Brigades were killed in the second Israeli airstrike on Gaza within 24 hours and an Israeli was stabbed to death by a Palestinian near the Qalandiya checkpoint at the southern entrance to Ramallah.
Israel said the talks on the US-brokered plan to allow "safe passage" of Palestinians initially in bus convoys between Gaza and the West Bank, which is due to begin operating next week, had been suspended until the Palestinian leadership took more action against militant groups.
As Israeli officials confirmed that the decision was taken in response to the bombing carried out by Islamic Jihad on Netanya, the chief Palestinian negotiator, Saeb Erekat, said the decision was a "flagrant violation" of the deal on improving access brokered last month by the US Secretary of State, Condoleezza Rice.
Mark Regev, a foreign ministry spokesman, denied that Israel had "abrogated" the terms of the agreement and said it was anxious to see progress in helping the Gaza economy. But he added: "After an outrage like this no one can expect business as usual or that Israel will simply turn the other cheek." Israel also arrested 23 wanted Palestinians in the West Bank overnight, including 20 belonging to Hamas.
Palestinian security forces have arrested more than 20 Islamic Jihad activists in the West Bank since the bombing, according to Islamic Jihad itself. Mr Regev said Israel needed more evidence of a crackdown than a "one-off" operation in response to an atrocity like last Monday's.
Alvaro de Soto, the UN's special Middle East representative said yesterday that it had been envisaged that the talks on Gaza access would progress without "the contamination of events". He added: "Our hope is that that the suspension ... is only a temporary hiccup and that the talks will resume soon."
The UN Office for the Co-ordination of Humanitarian Affairs said the poverty rate among Palestinians - largely because of closures - had risen from 55 to 64 per cent in 2005 despite a sharp slowdown in violence.Reuse content