GAZA CITY, May 14 (News Agencies) – Violence convulsed the occupied territories again Monday as two Palestinians were killed by Israeli troops in a roadside clash in the Gaza Strip and gun battles raged in east Jerusalem on a day which claimed seven lives.

Two Palestinians died and six others were injured when Israeli troops opened fire on a road near the Gush Katif settlement bloc in the southern Gaza Strip on Monday, Palestinian security sources said.

Overnight, Palestinian officials said five policemen were gunned down at a roadblock near Beitunia in the West Bank, after Israeli soldiers opened fire on them for no apparent reason.

Israeli army radio said Israeli soldiers had detected “suspicious figures” near a military camp and opened fire on them, but an anonymous Israeli official later admitted that the army might have committed a “blunder”.

The deaths raised the overall toll to 531 since the Palestinian uprising, or Intifada, broke out in late September, comprising 437 Palestinians, 78 Israelis, 13 Israeli Arabs, two Romanians and one German.

On the Gaza road, one Palestinian was killed when Israel said he tried to throw a hand grenade at an army post, while a passerby was shot dead in the same incident, security sources told AFP.

A fierce gun battle also broke out in east Jerusalem between the Israeli army and Palestinian gunmen, wounding four Israelis and five Palestinians, sources on both sides said.

The clashes erupted after a military post near the Jewish settlement of Gilo came under fire from the neighboring Palestinian town of Beit Jala west of Bethlehem, injuring four Israelis, including two women, Israeli military radio said.

During the crossfire, five Palestinians were wounded and four houses damaged by Israeli army shelling of Beit Jala and the nearby Aida refugee camp, said Palestinian witnesses.

Clashes also broke out as Israeli troops fired on some 2,000 Palestinians who accompanied the ambulance carrying the five dead Palestine policemen to the Qalandia checkpoint south of Ramallah, but no-one was injured, witnesses said.

The army closed the road briefly but later allowed the bodies to be transferred to ambulances from Gaza, where the men are to be buried on Tuesday.

Meanwhile, the Israeli army opened fire with heavy machine guns on a Palestinian police post at a town in the southern Gaza Strip and sealed off the area, security sources told AFP.

The army cut off access to the Palestinian town of Qarrara, north of the Khan Yunis area, they said.

In a rare attack on the occupied Golan Heights, a shell exploded in a restaurant often used by Israeli soldiers, causing no injuries, Israeli police said.

Overnight, Israeli helicopters, warships and tanks blasted Palestinian targets in the Gaza Strip, including some around the headquarters of Palestinian leader Yasser Arafat, with rockets and shells.

Hospital sources said that 15 people were hurt, none of them seriously.

An Israeli military spokesman said helicopter gunships had “attacked targets controlled by the Palestinian Authority in the Gaza Strip because of continuing terrorist activities and the escalation of violence in recent days.”

Hours before, Israel had moved its army briefly into Rafah, an area under full Palestinian control, in the sixth incursion in the Gaza Strip since Thursday, according to the Palestinians, contravening autonomy accords.

In Rafah, an 11-year-old boy was in serious condition after Israeli tanks fired shells and heavy machine-guns to protect army bulldozers building barriers in the area, Palestinian medical and security sources said.

In the West Bank village of Sinjil, near the Jewish settlement of Shilo, at least 10 Palestinians were injured by bullets or tear gas in a confrontation with Israeli forces seeking to demolish a Palestinian house, residents said.

The Israeli army also destroyed a Palestinian police station in the village of Shwaykah near the northern West Bank town of Tulkarem, a military spokesman said.

Arafat denounced the killing of the five Palestinian policemen – Ahmad Zakut, 27, Salah Ahmad Abu Amraa, 32, Mohammad al-Khaldi, 18, Mohammad Abu Dawood, 20 and Ahmad Abu Mustafa, 20.

“It’s not a killing, it’s an assassination and this is a dirty operation by Israel,” Arafat told reporters.

Aides to Arafat said the Palestinians had protested to the United Nations and called for an emergency U.N. Security Council meeting to stop Israeli attacks.

Following the latest Israeli offensive, Israeli Prime Minister Ariel Sharon declared that Israel had “no interest” in escalating the deadly tide of unrest.

“We have no interest in an escalation and I don’t think that there will be an escalation,” the hawkish Sharon told a gathering of deputies from the Labor party, one of the partners in his ruling coalition.

On the Lebanon border, Hezbollah fired anti-tank rockets on an Israeli army post in the disputed Shebaa farms border region, triggering artillery fire and helicopter machine-gunning, sources on both sides said.