Late Friday, an Israeli helicopter gunship carried out two raids on Gaza City's Zeitoun neighborhood, targeting two metal workshops in the area, sources on both sides said.

In the first raid, the helicopter fired two missiles, then returned after several minutes, firing another eight rockets at a second target in the area, completely destroying both of them, an AFP correspondent said.

Medical sources said four people were slightly injured in the raids.

An army spokesman confirmed the strikes, saying the raids had targetted two workshops which were used to produce Qassam rockets.

Earlier on Friday, Palestinian militants fired a home-made Qassam rocket at the southern Israeli town of Sderot, damaging one house and causing one person to be treated for shock.

Meanwhile, the Maariv daily reported that Israel is to carefully screen some 2,000 soldiers to coordinate the planned Gaza withdrawal in a bid to exclude any who might refuse to obey the evacuation order for ideological reasons.

The unit, to be commanded by General Yossi Turdjman, will operate jointly with police forces.

Settlers who are ready to leave ahead of the official four-phased withdrawal will qualify for early compensation within 10 days, the paper said, adding that the first settlement should be evacuated voluntarily next month.

Last week, the Israeli cabinet approved Prime Minister Ariel Sharon's plan to dismantle all 21 Jewish settlements in the Gaza Strip and another four in the West Bank.

In another move, the defence ministry invited tenders to study the feasibility of building a massive trench along the border between the southern Gaza Strip and Egypt.

The 25-meter (82-foot) deep trench, to be equipped with electronic devices, will initially stretch some four kilometers (2.5 miles) between the flashpoint Gaza town of Rafah and Egypt.

"By humidifying the sand, the trench will render the digging of tunnels by Palestinian weapon smugglers very difficult," Israeli deputy defence minister Zeev Boim told public radio Friday.

He said more than 90 weapons-smuggling tunnels had been uncovered in the area in three years and accused Palestinians of trying to transfer "dangerous strategic weapons, notably anti-aircraft missiles and (Russian-made) Sagger anti-tank rockets."

Construction of the trench, however, posed "enormous" logistical problems, Boim said, without elaborating.

A second section of the moat may be dug along the entire eight-kilometer Philadelphi road, which runs parallel to the border, which could mean the destruction of hundreds of Palestinian homes and financial compensation to their owners, Israeli media said.

Thousands of Palestinians were made homeless in Rafah last month when Israel staged its biggest offensive of the four-year intifada, or uprising, in order to widen a buffer zone along the Philadelphi road.

The army said the operation was aimed at destroying the tunnels network.

Meanwhile, in Cairo, Palestinian prime minister Ahmed Qorei met Egyptian President Hosni Mubarak to discuss the security situation after the Israeli withdrawal.

Neither Qorei nor Mubarak made any comment to reporters after the 30-minute meeting at the Egyptian leader's private residence.

Separately, Palestinian leader Yasser Arafat said he recognized the Jewish character of Israel in an interview published by the Haaretz daily, and stressed his readiness for compromise, including over the controversial issue of the refugees.

In Brussels, the European Union called on Israel to halt construction of its disputed separation barrier and urged Palestinians to do more to combat terror.

In the West Bank, over 2,000 Palestinians held weekly prayers in their fields to protest the confiscation of their land by construction of the vast separation barrier, residents said.

And the army said it nabbed an 18-year-old Palestinian student in the northern West Bank for her alleged involvement in "terrorist activities" as another six male militants were arrested in Jenin.

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