The violence came as Palestinian leaders tried to find a compromise that would allow Palestinian prime minister-designate Mahmoud Abbas to win parliament approval for his Cabinet by Wednesday's deadline. If the deadline is missed, Palestinian leader Yasser Arafat is seen likely to appoint another senior member of Fatah Party, his political movement, to the post.
In the overnight raid in the Rafah camp, Israeli soldiers destroyed two tunnels used for smuggling weapons under the Gaza-Egypt border and blew up the house of Mahmoud Abu Shamala, a leader in the militant Hamas group, the army said. Troops pulled out Sunday morning.
Gunbattles left five Palestinians dead, including a 15-year-old boy. An Israeli soldier was also killed.
"God is great!" the crowds chanted as they snaked through the streets of the Rafah camp, where more than 60,000 live in cramped quarters. Two sections of the camp are known hotbeds of violent Islamic groups.
In the West Bank town of Qalqiliya, troops on Sunday shot and killed Abderrahman Abed, 15, who witnesses said was with a group throwing stones and firebombs at troops.
Meanwhile, the impasse over forming a new Palestinian Cabinet continued.
Arafat appointed Abbas after intense international pressure to reform his corruption-plagued regime and share power. The U.S. and Israel wanted Arafat sidelined, saying he is linked to terrorism, but since then, Arafat has tried to retain control by vetoing key Cabinet appointments.
Abbas and Arafat held separate talks Sunday with members of Fatah, which dominates the Palestinian legislature. Arafat heads Fatah, and Abbas is his longtime deputy.
Abbas stormed out of a meeting with Arafat Saturday after they disagreed over the makeup of the Cabinet. Abbas and Arafat have been at odds over the role of former Gaza security chief Mohammed Dahlan, tapped by Abbas as minister of state for internal affairs, a role which would have some control over security matters.
Control of security forces is key to a U.S.-backed peace plan toward ending violence and establishing a Palestinian state. The plan is to be unveiled as soon as Abbas takes office.
But on Sunday, some observers said Abbas might fail to form a government.
"There is a very big chance...that Abu Mazen (Abbas) will not succeed," Palestinian legislator Soufian Abu Zaida said.
An official present at Saturday's meeting said Abbas threatened to resign unless his Cabinet picks were approved — which would be a major setback for efforts to end 30 months of Israeli-Palestinian violence.
Israeli Prime Minister Ariel Sharon last week praised Abbas and stressed that he was ready to reach a peace agreement with the Palestinians that would involve territorial concessions.
Altogether, 11 Palestinians and an Israeli soldier were killed over the weekend. Since fighting erupted 30 months ago, 2,266 people have been killed on the Palestinian side and 759 on the Israeli side.
In the West Bank towns of Bethlehem and Ramallah, hundreds of Palestinians demonstrated Sunday to protest the killing of APTN news photographer Nazeh Darwazeh, who died a day earlier while covering a clash in Nablus.
Many carried Darwazeh's picture, wore black scarves over their mouths to symbolize censorship and chanted "Justice and truth!"
Doctors said Darwazeh, 43, died of a bullet wound to the head. Palestinian witnesses said he was shot by an Israeli soldier, while the military said there were exchanges of gunfire and it was not clear who was responsible for his death.
Footage shows a man with a rifle in green combat fatigues kneeling down between an armored personnel carrier and the wall of the house. Witnesses identified the man as an Israeli soldier.
Three different sequences — taken by Reuters, by local Nablus TV and by Darwazeh himself — suggest it was this man who fired the shot that killed Darwazeh; it remains unclear, however, whether he had been aiming at the journalists and whether shots had been fired at the tank from down the steps.
Video footage taken by a Reuters cameraman showed several young Palestinian men running up the alley toward the tank and throwing stones at the vehicle.
Darwazeh had worked for APTN for two years and leaves a wife and five children.
The local Foreign Press Association issued a statement calling for a full investigation into Darwazeh's killing. The Palestinian Center for Human Rights, a local group, alleged the military was targeting journalists "in an attempt to silence the press and prevent public reporting of Israeli military actions."