JERUSALEM -- Israeli forces raided a West Bank city and a Gaza refugee camp on Thursday, setting off battles that left four Palestinian gunmen and a soldier dead.

The raids came despite a lull in Palestinian bombing and shooting attacks against Israelis, underlining Israel's policy of hunting down militants regardless of the ebbs and flows of violence.

In an interview on Channel 2 TV for the Jewish New Year, which begins today, Sharon said Israel will keep targeting militants.

"We are hitting, and we will continue to hit, those who strike out at us," he said.

In the clashes Thursday, Israeli forces backed by tanks and jeeps entered the West Bank city of Hebron before daybreak and surrounded a one-story building in a field where Diab Shweiki, the Islamic Jihad leader in Hebron, and his deputy, Abdel Rahim Talahmeh, were hiding, the army and Shweiki's relatives said.

A fierce gun battle followed, and when the fighting died down, army doctors entered the building and found the bodies of the two wanted men.

Also Thursday, Israeli forces moved into the Boureij refugee camp in central Gaza and surrounded a house. The military said the goal was to arrest a local Islamic Jihad leader, Jawad Shahin.

Palestinians opened fire, threw grenades and fired an anti-tank missile, killing a soldier and wounding six others, one critically, the military said. Two Palestinian gunmen were killed in the exchange, Palestinians said. Shahin escaped.

A 3-year-old girl, Lena Issa, collapsed during the fighting and died. Her father, Hassan Issa, 38, said the girl began shaking when the fighting began and lost consciousness, but because the house was 700 yards from the warring fighters, he could not get out to call an ambulance.

The girl was taken to a hospital after the soldiers left. Doctors said she died of a cerebral hemorrhage.

Israeli military sources expressed regret at her death and said it was reasonable the father feared leaving his house during the fierce battle.

The sources, speaking on condition of anonymity, said even if an ambulance had been called, it might not have been able to enter because of the fighting. They blamed the militants for operating in civilian areas.

Though Israeli raids in Palestinian areas take place almost nightly, the militant groups have not carried out a large-scale attack since twin suicide bombings in Israel on Sept. 9 killed 15 people.

However, the spiritual leader of Hamas, Sheik Ahmed Yassin, said Wednesday his group would not consider a truce with Israel as long as such operations continue, implying that Hamas would retaliate. Yassin, himself a target of a failed airstrike this month, was speaking before the latest Israeli raids.

Achieving a new truce to replace one that collapsed last month is Palestinian premier-designate Ahmed Qureia's top priority, according to Palestinian officials who met him on Thursday. Qureia is working to form a new government to replace that of Mahmoud Abbas, who resigned Sept. 6.

Palestinian leader Yasser Arafat's Fatah party is to appoint most of Qureia's ministers, and Qureia is meeting with a wide variety of faction leaders to solicit their support.

After seeing Qureia on Thursday, Hassan Hraishe of the Democratic Bloc, a loose grouping of nine independent lawmakers, said: "The main issue is to return all the stolen money from the monopolies, as we know that millions of dollars were stolen," he said, referring to sweetheart business deals given to Arafat cronies.

Hraishe claimed the money is "in secret accounts now, and the only one who can release them is Mohammed Rashid," Arafat's secretive financial adviser.

Despite repeated reports of skimming and other shady financial practices, Palestinian officials deny money has been diverted. Palestinian Finance Minister Salam Fayad dismissed reports this week that hundreds of millions of dollars in Palestinian funds had been shifted to Arafat's accounts.