JERUSALEM, Oct. 21 (AP)--Israeli soldiers and Palestinians militants skirmished in the roiling streets of the West Bank and Gaza Strip on Saturday, leaving three Palestinians dead and more than 100 injured in renewed battles that showed no signs of abating.

Also, tens of thousands of Palestinians marched in funerals and protests, with some activists taking the unusual step of torching photos of moderate Arab leaders who maintain contacts with Israel and close ties with the United States.

The unrest in Palestinian cities came as Arab leaders opened a summit in neighboring Egypt, unanimously condemning Israel for the more than three weeks of violence that have left 116 dead and more than 2,000 wounded, the vast majority Palestinian.

The Arab summit stopped short of calling for breaking ties with Israel, prompting Libyan delegates to walk out of the meeting because they wanted strong action against Israel.

The walkout signaled that moderates like Egyptian President Hosni Mubarak were prevailing at the summit, called amid outrage toward Israel, who they blame for the violence. Mubarak blamed Israel for bringing the peace process to a standstill but said Arabs would not abandon the path of negotiations.

Syrian President Bashar Assad, on the other hand, repeated the hard-line stance of his late father, sayin ``all kinds of cooperation with Israel should be stopped and the (international Arab) boycott should be reactivated.''

On the streets, many Arabs called for much more.

``The only way to liberate Jerusalem is through holy war,'' crowds chanted in San'a, Yemen, during an anti-summit, anti-Israel and anti-American protest that drew thousands on Saturday.

As the Israeli-Palestinian violence raged, a cease-fire mediated by President Clinton at a Mideast summit on Tuesday appeared to have failed.

Israeli Prime Minister Ehud Barak said Friday that he would might call an open-ended ``time-out'' after the Arab summit ends Sunday to rethink Israeli policy concerning the peace talks. Until now, a peace agreement with the Palestinians had been Barak's top priority.

Meanwhile, Amar Hassan, 28, a Palestinian taking part in a massive West Bank funeral march, said confrontation, not peace talks, will bring Palestinian independence. ``We should stop throwing stones,'' said Hassan. ``We should learn how to shoot, how to plant explosives near the roads.''

Some 20,000 mourners took part in the funeral procession in Nablus, where four Palestinians were shot and killed a day earlier while confronting Israelis. A lead truck carried masked militiamen hoisting their assault rifles and many carried flags of Arab countries, appealing for support from the summit. ``Oh Arabs, pay attention, the Palestinians are getting killed,'' the crowd chanted.

In a rare display of hostility aimed at moderate Arab leaders, Palestinian marchers at a protest in Hebron burned photos of Egypt's Mubarak, Jordan's King Abdullah II, Morocco's King Mohammed VI and Saudi Arabia's King Fahd.

Those Arab leaders are all strong supporters of the Palestinians, though Jordan and Egypt also have diplomatic relations with Israel, while Morocco and Saudi Arabia have close ties with the United States, Israel's leading ally.

``Mubarak, Abdullah and King Mohammed are traitors employed by the CIA,'' read one banner.

Marwan Barghouti, a prominent member of Palestinian leader Yasser Arafat's Fatah movement, predicted that the Palestinians would continue to take to the streets.

``There is great popular participation in this intefadeh (uprising),'' Barghouti said. ``This intefadeh will continue until the end of the occupation.''

A stone-throwing confrontation on the main street of Hebron in the West Bank escalated into an exchange of gunfire, witnesses said. A taxi driver away from the site of the clash was killed when he was hit in the head by a bullet, doctors said.

But the Israeli army said it did not use any live fire Saturday in the area where the Palestinian was shot in Hebron, which has been the scene of almost daily clashes.

In the Gaza Strip, 16-year-old Omar al-Bihassi was shot and killed in a confrontation near the town of Khan Yunis, and a rock-throwing clash broke out near the Erez crossing with Israel. At least 59 Palestinians were injured, according to Dr. Mouauia Hassina at the Shifa Hospital.

``My son, my son. They killed my son,'' wailed the boy's mother, Widad, at his funeral on Saturday afternoon.

Heavy shooting in the West Bank town of Ramallah, another chronic trouble spot, left one Palestinian dead and 45 injured, according to doctors at the Ramallah hospital.

Saturday's violence came on the heels of heavy fighting that left nine Palestinians dead and 103 injured on Friday, the deadliest day in two weeks.

After the Arab summit ends, the Israeli government said it may complete its assessment on ``unilateral separation'' from the Palestinians. In such a scenario, Israel would unilaterally draw a fortified border with the Palestinians without waiting for a peace agreement.

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