(Updates with Israeli defence ministry statement)

NABLUS, West Bank, Nov 5 (Reuters) - Palestinian President Mahmoud Abbas's forces clashed on Monday with gunmen for the first time since their deployment in the city of Nablus as part of a Western-backed push to bolster West Bank security.

Abbas's security forces imposed a curfew within the Balata refugee camp and searched houses for gunmen involved in the exchange of fire, in which five Palestinians were wounded including two security men.

An Israeli statement said Defence Minister Ehud Barak told Palestinian Prime Minister Salam Fayyad that if the deployment of Palestinian forces in Nablus proved successful it could be expanded to other West Bank towns.

But Barak added that depite the deployment, Israel would continue to retain overall security control in Nablus.

The United States has stepped up support for Abbas's security forces since Hamas Islamists seized control of the Gaza Strip in June. Abbas's secular Fatah faction continues to hold sway in the West Bank.

The clash was the first since members of Abbas's National Security forces deployed in Nablus on Friday. It came during a visit to the West Bank and Israel by U.S. Secretary of State Condoleezza Rice to lay the groundwork for a conference on Palestinian statehood.

Israel has said it will not implement any peace agreements with the Palestinians until Abbas cracks down on militants. The Palestinians say Israel has not carried out its own commitments to halt Jewish settlement activity.

A Palestinian security official said the fighting erupted after Abbas's forces chased after a group of gunmen who were shooting in the air.

Prime Minister Salam Fayyad said last week that the deployment in Nablus was a starting point for a broader campaign to restore law and order in the occupied West Bank ahead of the U.S.-sponsored conference.

"We will impose law and order in every place in Nablus and in the Balata refugee camp. We will collect weapons and those who carry them," said Brigadier Diab Alali, who commands the National Security forces in the West Bank.

(Reporting by Atef Sa'ad; Writing by Avida Landau and Ori Lewis; Editing by Matthew Jones)

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