A suicide bomber has killed three Israeli soldiers at the entrance to a Jewish settlement in the northern West Bank.

We can say with bitterness that the Palestinian Authority has done nothing against terrorism

Avi Pazner Israeli Government spokesman

At least 16 people are reported to have been injured, some seriously, and the bomber also died.

It is the second lethal Palestinian attack in a week, after two suicide bombers killed 14 people when they drove an car packed with explosives into a bus in northern Israel.

Two rival Palestinian groups, Hamas and the al-Aqsa Martyrs Brigades, have said they were responsible.

The Israeli Government has condemned the attack, saying that the Palestinian Authority led by Yasser Arafat, was doing nothing, while "Palestinian terrorists" continued to wage a campaign against Israeli civilians.

The Palestinian Authority also condemned the attack, which was claimed by the Al-Aqsa Martyrs Brigade - a splinter group linked to Mr Arafat's own Fatah faction.

'Suspicious'

The suicide attack took place in a petrol station at the entrance to Ariel, one of the largest settlements in the West Bank.

A group of soldiers and civilians were approached by a "suspicious-looking person", according to Shachar Ayalon, Israel's police chief for the West Bank.

The well-dressed man had reportedly driven up to the petrol station, and had been noticed by off-duty soldiers eating at a food stand.

He put his hands up after a woman shouted "Suicide terrorist!"

The soldiers approached the man - "then they tried to grab him and disarm him," said Yitzhak Zahavi, a reserve soldier slightly injured in the attack.

"When they saw he had his explosives on his body they shot him twice," said Mr Zahavi.

It was unclear whether the shots detonated the explosives or whether the bomber managed to do so himself.

"The terrorist was still burning when we got there and we extinguished the fire immediately," said a fire brigade official.

There was apparently little material damage at the settlement, which is one of the largest Jewish settlements in the West Bank, with a population of about 17,000 people.

Nablus killings

Shortly after the attack, two Palestinians were killed by undercover Israeli forces in the nearby town of Nablus.

Israel said its forces had tried to detain the militants, who had then opened fire.

Palestinian sources said the shootings were assassinations, adding that the men were members of the Al-Aqsa Martyrs Brigades.

Local officials said three people, including a child, were wounded.

The attack was the second in a week

The bombing was also followed by attacks on about 30 Palestinian olive pickers and foreign peace activists by Israeli settlers near Akrabeh, about 10 km (six miles) east of Ariel.

About 10 armed settlers are said to have thrown rocks at the group and beat them with rifle butts.

Among those injured were an American and an American-British citizen, aged 68 and 74, reported news agency Reuters.

Coalition crisis

The violence comes just a day after US envoy William Burns left the region after failing to persuade either side to adopt an internationally backed "roadmap" for peace.

Meanwhile, Israeli Prime Minister Ariel Sharon is facing a brewing crisis within his own government.

The central committee of Israel's Labour Party - which forms a ruling coalition with Mr Sharon's right-wing Likud party - approved a motion on Sunday to vote down the government budget for 2003 on Wednesday.

The Labour party, headed by Defence Minister Binyamin Ben-Eliezer, is loth to endorse the budget, which diverts social spending towards settlements.

Should the Labour party representatives succeed in voting down the budget, the coalition may collapse and Mr Sharon will be forced to call fresh elections in within 90 days - nine months earlier than scheduled.

Mr Sharon declared in a statement on Sunday that: "The responsibility for passing the budget lies with everyone, and anyone who does not demonstrate this responsibility, I say clearly, will not belong to the government."