JERUSALEM, Oct. 23 (AP)--With the peace process on ice, embattled Prime Minister Ehud Barak attempted Monday to cobble together a coalition government that would include hard-liners and could further diminish prospects for a peace treaty with the Palestinians.

Meanwhile, street clashes persisted Monday, and Israeli security forces clamped down on Palestinian areas, closing the airport in the Gaza Strip and sealing off a West Bank town that has been the source of shooting on a Jewish neighborhood of Jerusalem.

The Israeli army said that no one was wounded in a Monday roadside bomb attack against a convoy of Israeli cars driving from the Jewish settlement of Netzarim in the Gaza Strip.

An army spokesman labeled the bomb "very powerful." "We will respond to the attack in the right way and at the right time," the spokesman said.

Israeli security forces have been warning that Islamic militants were planning bomb attacks against Israeli targets in the West Bank and Gaza Strip and in Israeli cities.

An Israeli tank earlier fired an artillery shell at the West Bank village of Beit Jala after Palestinian gunman in the town sprayed Israeli apartment buildings on the outskirts of Jerusalem with machine-gun fire.

The Palestinian gunmen opened fire on the Gilo Jewish settlement near Jerusalem Monday, despite a warning by Israel that it would scale up its response if gunmen continued firing.

Machine guns mounted on Israeli tanks also returned fire, witnesses said. An Israeli police spokesman said one apartment building was damaged in the firefight but there were no injuries.

Barak, who announced an indefinite "time-out" from the disintegrating peace process on Sunday, turned his focus to salvaging his shrunken coalition before parliament returns from a three-month recess on Oct. 29.

To keep his government from collapse and avoid early elections, Barak was wooing the leader of the right-wing opposition, Ariel Sharon--the man Palestinians blame for provoking the current spasm of violence.

On the 26th straight day of fighting, Israeli troops and Palestinian militants also traded gunfire along the narrow main street in Hebron on the West Bank. One soldier was injured by a ricocheting bullet, the army said. Palestinian stone-throwers clashed with Israeli soldiers at two chronic trouble spots in the Gaza Strip, with 36 Palestinians wounded, hospital doctors said.

"The situation is really deteriorating. The worst hasn't happened yet," said Saeb Erekat, a senior Palestinian negotiator.

Two Palestinian teenagers died Monday from head wounds suffered in earlier clashes in the West Bank town of Nablus. The deaths brought the overall toll to at least 123, all but eight of them Arabs. The fighting erupted after Sharon made a Sept. 28 visit to the most contested religious shrine in Jerusalem--the Temple Mount/Haram al-Sharif compound--sacred to both Jews and Muslims.

In the West Bank town of Bethlehem, protesters spray-painted a donkey to resemble the blue-and-white Israeli flag, and tied up the animal in the street where rock-throwers and soldiers clashed. The protesters also meticulously painted the names of Barak and Egyptian President Hosni Mubarak on the donkey.

"I want to bring Barak down to the level of the donkey," said the artist, Khalid Mustafa, 20.

Mubarak was included for playing host to a weekend Arab summit that condemned Israel for the recent violence but declined to take stronger action--disappointing many Palestinians.

With no letup in the confrontations, Israel tightened restrictions on several Palestinian areas.

The Israelis closed the Palestinian airport in Gaza City for the second time since the violence erupted, further inhibiting Palestinian travel. "We consider this as another step in the hard siege on the Palestinian people," said Salman Abu Halib, general director of Palestinian Airlines.

The army also blockaded Beit Jalla, a Palestinian town used by gunmen to shoot at the Jewish neighborhood of Gilo on the southern edge of Jerusalem.

Israel responded Sunday night with combat helicopters that fired rockets and, for the first time, tank fire. Beit Jalla and nearby Bethlehem were plunged into darkness, a Beit Jalla factory was destroyed, and several homes damaged.

Israel has accused the Palestinians of failing to rein in gunmen, but a senior Palestinian security official, Jibril Rajoub, said Israel bore responsibility for the hostile climate.

"I think we can control the streets if the general atmosphere, if the political climate, is hopeful, if the aspirations of the Palestinian people are met," said Rajoub, who is in charge of security on the West Bank.

Barak's decision to withdraw from the peace process, at least temporarily, has put on hold seven years of grinding negotiations with the Palestinians. However, in the current climate of bitterness, there was little hope of holding new talks, let alone solving knotty problems.

After Barak announced the suspension Sunday, Palestinian leader Yasser Arafat said the Israeli leader could "go to hell."

Arafat has threatened in the past to unilaterally declare a Palestinian state, and Israel has been considering a "unilateral separation" from the Palestinians that would include setting boundaries. The United States has urged both sides to refrain from unilateral actions.

Barak's coalition fell apart in July, and he currently controls only 30 seats in the 120-member legislature. If he fails to bring Sharon's Likud party into the government, the government's collapse and early elections appear almost inevitable. Barak and his negotiators met with Sharon and planned additional talks Tuesday.

Sharon has said he would not join the government unless Barak distances himself from concessions he offered the Palestinians during a Mideast summit in July hosted by President Clinton.

Palestinians revile Sharon, who believes Israel should cling to land captured in the 1967 Mideast war rather than trade it for a peace agreement with the Palestinians. He has said he would favor a long-term interim deal between the two sides that would allow Israel to keep most or all of the land currently under its control.

Barak also was meeting Monday with the ultra-Orthodox Shas Party and the dovish Meretz factions, both former coalition members.

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