GAZA CITY, Gaza Strip — In a test of Yasser Arafat's ability to crack down on militants, hundreds of Palestinian police surrounded the hideout of a fugitive militant leader Thursday but failed to arrest him when his supporters opened fire.
In the West Bank, Israel slightly eased restrictions that had been tightened last week after a Hamas bus attack killed 10 Israelis. Troops withdrew from the Palestinian town of Nablus, and tanks also pulled out of two neighborhoods in the town of Ramallah — though they remained in position near Arafat's headquarters.
The fighting in Gaza City and the Israeli troop pullback came just hours after Palestinian and Israeli security commanders resumed coordination meetings.
The U.N. envoy to the region, Terje Roed-Larsen, said he was encouraged by the Israeli pullback and the ongoing Palestinian crackdown on militants, including the attempt Thursday to arrest Abdel Aziz Rantisi, the most senior figure from the terrorist group Hamas to be targeted by the Palestinian leadership so far. "Potentially, it's a turning point," Roed-Larsen said, adding that the situation remained fragile.
In Jerusalem, meanwhile, the top Roman Catholic clergyman in the Holy Land criticized leaders on both sides for not stopping the violence.
In his Christmas message, Latin Patriarch Michel Sabbah took Israel to task for its treatment of the Palestinians, including a stifling blockade of Palestinian communities, and spoke out against Palestinian suicide bomb attacks in Israel.
"What we need today in the Holy Land is not leaders who teach us to make war and ask their people to accept sacrifices, including their lives, but leaders who have visions of justice and peace," Sabbah, a Palestinian, told a news conference.
Israeli-Palestinian security talks held late Wednesday indicated an easing of tensions less than a week after U.S. envoy Anthony Zinni left the area, his truce mission scuttled by bloody Palestinian attacks and large-scale Israeli retaliatory strikes.
Since Arafat renewed a truce call over the weekend, there has been a relative lull in violence.
However, the Palestinian security chief in the West Bank, Jibril Rajoub, said no progress was made in the talks. He said the Palestinians rejected an Israeli proposal, first voiced by Foreign Minister Shimon Peres, that the Palestinian Authority carry out its crackdown on militants in stages, with Israel easing restrictions in areas where significant steps against suspects had been taken. Rajoub said "the Israeli policy of aggression should stop immediately in all Palestinian places."
The showdown outside Rantisi's hide-out began early Thursday. Several police officers pulled up outside the house, drawing fire from Hamas supporters inside, witnesses said. The officers called in reinforcements, and eventually about 300 policemen were deployed in the area.
Hamas supporters, using loudspeakers of a nearby mosque, asked activists to rally to protect Rantisi, warning falsely that Israeli undercover soldiers were coming to arrest him. About 200 Hamas backers rushed to the scene.
Hamas gunmen opened fire, and three policemen and two bystanders were hurt, witnesses said. Hamas supporters also threw five hand grenades.
Rantisi has spent time in Palestinian and Israeli jails for his role as a Hamas leader, especially as a spokesman who has frequently spoken out in favor of attacks against Israel.
He said Thursday that he would not surrender. "The place of the freedom fighters is among the Palestinian people, to be defended by the Palestinian people against this Israeli occupation," Rantisi told a reporter by phone from the house.
Police said they held Rantisi responsible for the violence, but withdrew to keep civilians from being hurt.
Since the weekend, Palestinian police have shut down more than two dozen offices linked to Hamas and its smaller sister group, Islamic Jihad.
On Wednesday, the Palestinian Authority announced it detained 15 members of its security service for defying orders to stop attacks on Israelis. The detainees belong to militias affiliated with Arafat's Fatah movement.
Late Wednesday, Palestinian police said they arrested 13 suspected Hamas members and shut down five metal workshops in the Gaza Strip on suspicion they were manufacturing mortar shells. Three owners were arrested, police said.
Hamas and other militant groups have said they would not observe a truce, and a recent opinion poll indicated that only about one-third of Palestinians support a cease-fire.
In the Khan Younis refugee camp in the southern Gaza Strip, about 3,000 people, including many Fatah supporters, marched in support of Arafat on Thursday. About 200 gunmen led the procession, firing in the air and waving Arafat pictures.
Mohammed Kayed, a leader of the local Abu Rish militia linked to Fatah, said he and his men would not permit anyone to defy Arafat. In the past 15 months of fighting, the Abu Rish militia was involved in repeated shooting attacks on Israelis.