Annan condemns Mideast violence
UNITED NATIONS (CNN) -- U.N. Secretary-General Kofi Annan has condemned the escalating violence between Israelis and Palestinians.
He said that both sides are standing on the edge of a precipice, and need to step back and start discussions if their differences are to be resolved.
His comments came as Israeli tanks and bulldozers entered Palestinian-controlled Gaza early on Friday.
According to Palestinian security officials, Israeli forces destroyed a police post and three houses in the village of Deir al-Balah, 800 metres inside Gaza.
They also blocked a main east-west road, effectively cutting Gaza in two.
An Israeli military spokesman said the incursion was in retaliation for a Palestinian grenade attack on an Israeli army post near the Jewish settlement of Gush Katif.
An Israel Defense Force spokesman said: "Two soldiers were lightly injured from fragments of hand grenades thrown from a passing vehicle at an IDF post near Gush Katif junction.
"The car managed to escape towards the Palestinian police post and the terrorists were seen entering it.
"The IDF opened fire on the police post and subsequently demolished it with engineering tools."
In a separate development Israeli Prime Minister Ariel Sharon has rejected a key proposal in a U.S. plan to end the ongoing violence in the region.
A report on the violence, endorsed by Secretary of State Colin Powell, had recommended that as a first step towards peace Israel should stop work on Jewish settlements in the West Bank and Gaza.
Sharon, however, dismissed the recommendation, saying that while his government would not build any new settlements, it reserved the right to expand existing ones to accommodate "natural growth."
A Gallup Poll published in the Israeli daily newspaper Maariv on Friday showed that a majority of Israelis would freeze construction of settlements in Palestinian-controlled areas in return for peace.
Of 850 people questioned 55 percent supported a freeze in settlement-building, while 39 percent opposed a freeze, with six percent undecided.
Reuters contributed to this report.
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