Israeli and Palestinian negotiators agreed today to keep talking after an inconclusive overnight meeting, but US President Bill Clinton conceded the odds were stacked against a peace deal before he leaves the White House.
After a lull in months of fighting that has left more than 360 people dead, the Israeli army said soldiers had shot dead a Palestinian gunman in the West Bank city of Hebron after a grenade was thrown at them.
Witnesses said Jewish settlers had given soldiers sweets after the killing.
The first confirmed fatality in the conflict for more than two days came after the two sides reported no breakthrough at late-night negotiations on the Israel-Gaza frontier.
Palestinian negotiator Mr Saeb Erekat said: "It was agreed with the Israeli side that we will meet again tomorrow".
But he flatly denied reports that Palestinian leader Mr Yasser Arafat would meet Mr Shimon Peres, Israel's former prime minister, later today.
Mr Danny Yatom, a senior aide to Israeli Prime Minister Ehud Barak, told Army Radio: "Wide gaps still exist...There was no breakthrough. Palestinian President Yasser Arafat was cautious.
"We are still discussing what happened in that meeting and will make a report in that regard", he told reporters after prayers in Gaza.
Reuters