ISLAMIC militants issued a direct challenge to the new Palestinian leader yesterday, launching a bomb attack on an Israeli army patrol.

In a bloody incident that illustrates the fragility of hopes for peace since Mahmoud Abbas’s election on Sunday, an Israeli settler and three Palestinian gunmen died during the attack in Gaza when an Islamic Jihad unit blew up an Israeli military vehicle near the Jewish settlement of Morag.

The Israeli army said that militants cut through a security fence ringing the settlement and planted bombs on a road before the vehicle approached. As it passed one gunman set off the bombs then opened fire, killing one 28-year-old settler, injuring three soldiers and triggering a gun battle in which the militant group said three of its men were killed. In later searches Israeli troops found that the entire area was booby-trapped with more explosives that did not go off. But it was Islamic Jihad’s later claim of responsibility that lent the incident greater political significance.

“Our heroic attack today responds to those who describe such attacks as the smaller jihad that must end,” said Abu Abdallah, the group’s spokesman. “It will never end until Palestine is returned, through the barrel of our guns.”

The remark was clearly directed at Mr Abbas, who has branded the armed intifada a mistake and said during his election campaign that the “smaller jihad (struggle) is finished and greater jihad has already started”.

This is a deliberately vague phrase capable of wide interpretation, but appears to echo remarks attributed to the Prophet Muhammad referring to battle as the “smaller” and the spiritual struggle as the “greater” jihad.

Islamic Jihad, and its larger and more powerful Islamist rival Hamas, boycotted the presidential election in which Mr Abbas was elected, and have insisted that their armed resistance will continue.

By carrying out such attacks the Islamists are challenging Mr Abbas, offering the Palestinian public a choice between co-operation with Israel and continued attacks on Israeli soldiers and settlers in the occupied West Bank and Gaza settlements, which are considered illegal under international law — although not by Israel.

Violence continued elsewhere, with Israeli forces killing two suspected Hamas members in an army operation in Karawat Beni Zeit village north of Ramallah in the West Bank, and rockets fired from Gaza landing on Israeli towns and settlements the day before.

Meanwhile, Ariel Sharon, the Israeli Prime Minister, survived a challenge when pro-settler rebels failed yesterday to block his Likud-led coalition’s 2005 budget. Mr Sharon this week formed a new administration, bringing in Shimon Peres’s centre-left Labour and a small ultra-Orthodox party to push through his controversial Gaza withdrawal plan.

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