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Israel's Cabinet on Sunday approved an agreement with the PLO on expanding Palestinian autonomy in the West Bank, as two weeks of protests by Jewish settlers against the plan turned deadly for the first time.

Witnesses said settlers opened fire on Palestinians who ransacked their camp on a rocky West Bank hilltop, killing 22-year-old Kheiri al-Qaissi. Settlers denied they caused his death.Some 250 Jewish settlers rioted afterward in downtown Jerusalem to protest the detention of a man suspected in the shooting. Police used water cannons and mounted police to disperse them.

Earlier Sunday, the Cabinet approved an agreement under which Israeli soldiers would withdraw in stages from much of the West Bank no later than July 1997. The vote was 15-1, with two ministers abstaining.

Some ministers criticized the pact, worked out last week in 20 hours of meetings between Foreign Minister Shimon Peres and PLO chairman Yasser Arafat, as forcing Israeli troops to withdraw too quickly from the West Bank, occupied since 1967.

Major gaps remained over sharing the West Bank's water and how to provide security for Hebron, where 450 Israeli settlers live among 80,000 Palestinians.

About 140,000 Jewish settlers live in the West Bank amid 1 million Palestinians. While the transfer of parts of the West Bank to Palestinian control is supposed to start this year, Prime Minister Yitzhak Rabin has promised the settlements can stay put until the final status of the area is determined in talks scheduled to begin next year.

After the vote, Rabin said Israel would insist on keeping east Jerusalem and some parts of the West Bank, like the Jordan Valley, as part of a future final settlement.

Environment Minister Yossi Sarid, a peace negotiator and outspoken dove, maintained the West Bank autonomy was in line with the September 1993 Israel-PLO accord. But he agreed that "although officially there is not going to be a Palestinian state, as far as I can judge the situation, it is a Palestinian state."

Sarid said Israeli and PLO delegations were resuming talks Sunday night in Taba, Egypt, on a detailed accord.

Sunday's shooting was the first serious violence since settlers began their campaign against West Bank autonomy. The settlers, claiming a withdrawal would put them in danger, are demanding a national referendum on any agreement with the Palestine Liberation Organization.

Since the protest began, police and soldiers have dragged hundreds of settlers off West Bank hillsides, where they have established makeshift neighborhoods in defiance of both the Palestinians and the Israeli government.

But there were no troops in sight when about 100 Palestinians from the nearby village of Dura al-Qara marched up Artis Hill near the Jewish settlement of Beit El early Sunday. Finding most of the settlers gone, about 20 Palestinians, including several women and children, knocked over a tent, hurled rocks at an unfinished concrete-block house, and burned an Israeli flag and Bible.

A car carrying at least seven settlers then drove up, and several people began firing at the Palestinians, according to an Associated Press Television cameraman at the scene.