At least three people have been killed in separate attacks against Israeli forces in the Gaza Strip.

Police say the car bomb was packed with bits of metal

A bomb exploded under an Israeli tank near a refugee camp, killing at least one Israeli soldier. Another died elsewhere in the Strip, when a Palestinian fired on a patrol before being shot dead himself.

Later on Thursday four Israeli attack helicopters, accompanied by an F-16 warplane, fired several missiles at a metal workshop near the Palestinian police headquarters in the central Gaza city of Khan Younis, Palestinian sources told the Associated Press news agency.

There are no reported casualties, hospital officials said.

Israel has attacked Palestinian factories before, claiming they are used for making explosives, rockets and mortars for use in attacks against Israelis.

As violence flared in Gaza, the Israelis said they had foiled an attempt to smuggle a massive car bomb from the West Bank into northern Israel.

The 600-kilogram bomb (1,350 pound) is one of the largest ever discovered.

Israel is on high alert for a possible new wave of attacks by Palestinian militants during the Jewish New Year holiday which begins on Friday night.

Violence in Gaza

The Israeli tank rolled over an explosive device near the Maghazi refugee camp.

One Israeli soldier was killed and at least three others wounded, the military said.

The Popular Resistance Committee, an umbrella group representing several Palestinian factions said it was behind the attack.

Earlier, an Israeli officer was killed and another soldier injured when a Palestinian gunman opened fire on them near the Jewish settlement of Nitzanit in the northern Gaza Strip.

Israeli soldiers then rushed to the scene and shot the gunman dead, an army spokesman said.

Malek Grifat, 24, was named as the dead soldier. The al-Aqsa Martyrs Brigades, an armed group linked to Palestinian leader Yasser Arafat's Fatah faction, claimed responsibility for the shooting.

Disaster averted

The car bomb was found in northern Israel, after civilian volunteers spotted two suspect cars travelling fast on a winding dirt road leading from the West Bank.

Sharon said he sees a chance for peace

They were heading in the direction of the Israeli town of Hadera.

Police said the explosives, gas canisters and a mobile phone were attached to the fuel tank of the van and would have been detonated by remote control.

Israeli bomb disposal experts blew up the device in a controlled explosion.

Police are now combing the area using tracker dogs and helicopters, in the hunt for two men, who are believed to have fled into Israel.

Foreign Minister Shimon Peres said the discovery of the bomb was a "miracle".

Had the bomb gone off "it would have cost such loss of life that it would have changed almost the entire political situation in one moment," Mr Peres told the Associated Press news agency.

The bomb's discovery comes after nearly a month in which no Israelis have been killed by Palestinian militants inside Israel.

Hours earlier Israeli Prime Minister Ariel Sharon told Israeli television that he saw the possibility of a negotiated peace deal with the Palestinians.

In the West Bank, Israeli troops arrested four wanted Palestinians near the city of Nablus, said to be planning a suicide attack to mark the Jewish holiday.