With your assassination of Raed Karmi, you have opened hell on yourselves - you will be burned by its fire

Al-Aqsa Martyrs' Brigade statement

The Al-Aqsa Martyrs Brigade, a Palestinian militant group linked to Yasser Arafat's Fatah faction, said it had carried out the shootings, in which two other Israelis were wounded, in revenge for the death of its leader, Raed Carmi.

Palestinian officials blamed Israel for the killing of Karmi, who they said had been lured out of his house by a phone call shortly before the blast.

If confirmed as an Israeli killing, it would signal a return by Israel to its controversial policy of targeting Palestinian activists it believes are involved in planning attacks on Israelis.

In a statement, the al-Aqsa Martyrs' Brigade vowed revenge for Karmi's death, declaring that Israel had "opened the fire of hell upon itself".

Hours later, the group said it had carried out the attack near the Jewish settlement of Shavei Shomron, outside Tulkarm, in which the soldier was killed.

Hundreds of residents of Tulkarm paraded Karmi's dead body through the streets clamouring for revenge, while gunmen fired into the air.

Israeli officials did not confirm or deny responsibility. They just released a list of Mr Karmi's alleged crimes, saying he had killed nine Israelis in shooting attacks.

Demolition controversy

Israel earlier announced that it had decided to stop demolishing Palestinian homes in the West Bank and Gaza Strip.

The move follows international criticism and heated debate within Israel over the demolition of dozens of buildings at the Rafah refugee camp in Gaza following an attack by Palestinian militants last week.

The sight of more homeless Palestinians triggers more anger

Palestinians said the action left scores of families homeless; Israel said most of the buildings were being used as shelter by Palestinian gunmen and weapons smugglers.

"We learned a lesson and reached the conclusion that this method - the damage it causes is greater than the benefit," said Israeli Foreign Minister Shimon Peres.

'Ticking bomb'

Karmi had narrowly escaped assassination last September when Israel launched a rocket attack on a car he was travelling in, killing two passengers.

He was high on a list of Palestinian militants Israel has asked the Palestinian Authority to arrest.

Israeli officials said the Palestinian Authority had insisted Karmi was in jail, but it was clear he was not.

Israeli Transport Minister Ephraim Sneh said Karmi was planning more attacks.

"A man like this is like a ticking bomb. He who lives by the sword dies by the sword," he told Israel army radio.