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Thousands dead in India; quake toll rapidly rising

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Bomb in Jerusalem market kills at least 2

Blast follows Israel-Palestinian cease-fire agreement

JERUSALEM (CNN) -- Police say at least two people were killed Thursday when a bomb exploded at the Machane Yehuda market in central Jerusalem, just hours after Israel and the Palestinians agreed to steps aimed at ending more than a month of violence.

CNN's Mike Hanna says the blast injured several other people and damaged cars. A column of smoke could be seen rising over the market.

On Wednesday night, Palestinian leader Yasser Arafat and former Israeli Prime Minister Shimon Peres reached agreement to implement a cease-fire forged last month in Sharm el-Sheikh, Egypt.

Israeli Prime Minister Ehud Barak had scheduled a news conference for Thursday to discuss the peace developments.

Mideast peace

After news of the agreement was released, Palestinian police began stopping young demonstrators in Gaza from throwing stones at an Israeli army outpost, reported CNN's Fionnuala Sweeney.

Meanwhile, the Israeli army said it is withdrawing tanks that have sealed off Palestinian cities.

However, Israeli opposition officials expressed skepticism about the deal. And on the Palestinian side, the Islamic militant group Hamas said it would not abide by the agreement, Sweeney reported.

Barak's office announced earlier that an agreement had been reached after Arafat and Peres met for about two hours.

"An understanding was reached between Israel and the Palestinian Authority on a series of steps on the basis of the Sharm understanding that are due to lead to the renewal of security cooperation and a halt to the violence and incitement," Barak's office said in the statement.

Barak's office said the agreement has put a stop to retaliatory steps that Israel's security Cabinet had sought overnight in the wake of the killing of three Israeli soldiers on Wednesday.

Six Palestinians died in Wednesday's violence.

Barak and Arafat are both expected to announce the agreement in joint statements at 2 p.m. Thursday local time (7 a.m. EST).

'Welcome development'

The White House welcomed the announcement.

"We have been informed of this by both parties. It's a welcome development, and we'll be looking for full compliance by both sides," said White House National Security Council spokesman P.J. Crowley.

Earlier in Washington, acting Israeli Foreign Minister Shlomo Ben-Ami said the killing of the Israeli soldiers showed the conflict with the Palestinians was "a war in many senses," but he also said the two sides might be able to save peace talks and reach a settlement.

While the Israeli Cabinet had given no details of the steps it planned, Israel told staff at Palestinian television stations in the West Bank town of Hebron on Wednesday to evacuate their premises. Similar warnings in the past were followed by Israeli military attacks on the buildings.

Two Israeli soldiers and three Palestinians were killed Wednesday during a gunbattle south of Bethlehem. Four other Israeli soldiers were injured, CNN was told.

Israeli helicopters were called in after the Israel Defense Forces said four of its soldiers were wounded in exchanges of gunfire with Palestinians. Jewish settlers in the area were also said to have been involved in the fighting.

One of the three Palestinians killed was a 30-year-old Palestinian policeman who witnesses said was not involved in the fighting. Palestinian officials said at least 17 Palestinians were wounded.

The other Israeli soldier was killed in fighting in Jericho. Later, Israeli helicopter gunships fired on Palestinian organizations in the area.

Bullets light the sky on Wednesday night over Gilo, a predominantly Jewish neighborhood on the outskirts of Jerusalem on land claimed by the Palestinians  

Israeli forces opened fire on the Palestinian town of Beit Jala after they said Palestinians were firing into an Israeli neighborhood in the disputed enclave of Gilo on the outskirts of Jerusalem.

Earlier Wednesday, two Palestinian teen-agers were shot in the head and killed by Israeli troops at Karni crossing in Gaza. Later, another Palestinian was killed in the same area.

Doctors said the two teens killed Wednesday were 15 and 16 years old.

A massive funeral that drew thousands of mourners was held Wednesday in Gaza City for four people killed at the crossing Tuesday. The body of one of the teen-agers killed Wednesday was also brought to the mass funeral for burial at what the Palestinians are calling a "martyr's cemetery."

Mourners called for new attacks and resistance against Israeli forces.

Reuters contributed to this report.

Agreement to implement cease-fire reached, Barak's office says
November 1, 2000
Peres, Arafat will meet, try to end Mideast violence
October 31, 2000
Barak outlines path to peace; Israeli helicopters open fire
October 30, 2000
Palestinian negotiator says violence will stop if Israel withdraws troops
October 29, 2000
Israelis, Palestinians mark one month of clashes
October 28, 2000
Ramallah clash erupts into gun battle
October 27, 2000
Militant group claims responsibility for Gaza suicide bombing
October 26, 2000

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