(Adds Palestinian killed in Nablus, previous GAZA)

By Atef Sa'ad

NABLUS, West Bank, June 2 (Reuters) - Israeli undercover forces killed a Palestinian shopkeeper and wounded his brother on Saturday during an apparent attempt to shoot two gunmen in the occupied West Bank, Palestinian security officials said.

The soldiers, disguised as Palestinians, opened fire from a building overlooking a meat and vegetable shop in the centre of the town of Nablus when the two militants appeared, but hit the two civilians instead, the officials said.

An Israeli military spokeswoman said Israeli forces shot at a gunman armed with an assault rifle and reported hitting him.

Hours earlier, the Israeli army blew up several cement barriers that militants had placed in Nablus to prevent Israeli vehicles from driving through the streets, witnesses said.

Nihad Masri, the acting mayor of Nablus, said a few people sustained minor injuries from the blasts in the old city.

Palestinian Information Minister Mustafa Barghouthi said the army's action in blowing up the barriers was "a new crime coming in the context of Israeli escalation against the Palestinian Authority and people".

An Israeli military spokeswoman said troops had found three explosives laboratories in Nablus this year along with numerous explosive belts being prepared for suicide bombers.

"It is the capital of terrorism in the West Bank. That is why it is important for the soldiers to go in there and prevent terrorists from leaving there (to attack Israel)," she said.

Israeli-Palestinian violence has surged in recent weeks with rocket attacks from the Gaza Strip and Israeli strikes against militants in the territory.

In the Gaza Strip, Israeli soldiers shot and wounded two Palestinians near the border fence with Israel, local medical officials said.

The army spokeswoman said soldiers opened fire after the men ignored shouted orders to stop and warning shots.

On Friday, Israeli troops killed two Palestinian youths in the northern Gaza Strip close to the frontier with Israel. An Israeli army spokeswoman said troops had shot at suspicious figures trying to plant an object close to the barrier.

The Israeli military has declared areas near the border fence, where militants have often tried to place explosives, no-go zones for Palestinians. Israeli troops and settlers pulled out of the Gaza Strip in 2005.

(Additional reporting by Nidal al-Mughrabi in Gaza and Jeffrey Heller in Jerusalem)

AlertNet news is provided by