Palestinians see the blockade as collective punishment

Ghazi Jibali, the Gaza police commander, was quoted as saying that three bombs had been planted in a school and that Palestinian police defused two of the devices, while the third exploded.

He said the devices had been planted by Palestinian collaborators.

But other reports said a device had exploded after being prodded by local civilians and that they - not policemen - were those killed.

The Israeli army said it was investigating the report, but had no details.

Closure

The explosion came amid tightened security as Israel began independence day celebrations marking its 53rd birthday.

Israel imposed a total blockade on the West Bank and Gaza Strip and warned people to look out for suspect packages and people.

Israelis are nervous that bombers might have slipped through the security net before the borders were closed. Festivities are continuing, but many people are celebrating at home.

The closure, which took effect on Tuesday night, is due to be lifted at 0200 on Friday (2300GMT on Thursday).

Independence day is regarded with resentment by many Palestinians, who see it as a celebration of the day their land was stolen from them.

Peres to Cairo

Earlier Israel said it had lifted its blockade of the West Bank town of Jericho, following security talks with Palestinian officials mediated by the United States.

Peres: Heading for Cairo

There appears to have been some progress on the talks front. Israeli Foreign Minister Shimon Peres is to go to Cairo on Sunday to give Israel's response to a Jordanian-Egyptian proposal for future Middle East peace negotiations.

"We received a proposal. We think it needs some changes and improvements," Mr Sharon said in an interview in Wednesday's Jerusalem Post newspaper.

He said the talks should not be considered as negotiations but rather as an attempt to stop the current violence.

Senior Palestinian negotiator Saeb Erekat criticised the suggestion that the wording of the Jordanian-Egyptian proposal be altered.

"When Israel says it wants to modify it, it is in fact trying to sabotage the plan," Mr Erekat said.

According to the newspaper reports, the peace proposal calls for steps to rebuild confidence, including a halt to Israel's settlement activities, a lifting of the blockade on Palestinian areas and a troop withdrawal to positions held before the start of the Palestinian uprising in late September last year.