TEHRAN A new incursion Wednesday by Israeli troops into Palestinian territories in the Gaza Strip further undermined hopes of an early breakthrough to end the violent Palestinian Intifada, or uprising, now in its eighth month.

As Zionist Foreign Minister Shimon Peres continued efforts in Washington to involve the United States in a new peacemaking initiative, the overnight raid which killed one man, and wounded a dozen others sharpened tensions and raised fears of more Palestinian retaliation.

According to AFP, the incursion, which the Israeli Army said was in response to an attack on a routine patrol Tuesday, came after a particularly bloody two-day period in which eight people -- including two Palestinian children -- lost their lives.

Palestinian officials said the Israelis used tanks and bulldozers to penetrate around 100 meters into Palestinian territory at Rafah on the frontier between the Gaza Strip and Egypt, destroying 17 houses and a number of sheds and chicken-houses, and damaging a mosque.

A 17-year-old, Mahmud Akel, was killed after being shot in the chest, and 12 other people were injured, they said.

Reuters quoted the Israeli Army as saying that troops moved in to destroy buildings used by Palestinian gunmen as cover to fire at soldiers and as bases for planting roadside bombs.

"I was asleep when the invasion started but when I recognized the noise of the tanks and bulldozers ... I ran in my pyjamas from the house. Soon the house vanished," said Palestinian farmer Mahmoud Hassan, 61.

Israeli troops covered what the army called the "Operational Engineering Activities" of the bulldozers with tank and automatic fire as Palestinians fought back with grenade launchers and automatic weapons during the four-hour raid, Palestinian witnesses said.

Last month Israel launched a similar incursion that demolished homes in the Khan Younis refugee camp in the Gaza Strip.

As Israelis claimed, the raid was an "act of legitimate defense" after their soldiers came under grenade and gun attack Tuesday in the same area. That attack sparked a four hour shootout, during which a Palestinian outpost was destroyed and Palestinian police officer killed.

In Washington, which strongly criticized an Israeli raid into Gaza last month, Peres was to hold talks with Secretary of State Colin Powell in a bid to energize U.S. diplomatic muscle behind the latest moves to achieve a cease-fire. He sees President George W. Bush today.

Fears of the violence spiraling further out of control have been heightened by the killings of the last two days, with Palestinians blaming Israel for explosions in which five people died, and settlers demanding tough action to avenge the death of Assaf Hershkowitz, killed in an ambush Tuesday.

Sharon visited the West Bank settlement of Ofra where Hershkowitz lived Wednesday, and attended talks with local Jewish officials on ways of improving security.

Despite massively voting for him in February's elections, the 200,000 settlers are increasingly disappointed by Sharon's failure to live up to his promises to suppress the Intifada, in which 75 Israelis are among the 508 dead.