GAZA CITY, Gaza Strip - An angry and frustrated Egypt, blaming Israel for escalating violence, recalled its ambassador to Israel on Tuesday, but said it is not abandoning efforts to achieve peace.
Jordan, the only other Arab country that has a peace treaty with Israel, announced it was holding up accreditation of its new ambassador to Israel until the Jewish state halts its attacks on Palestinians.
Israeli Prime Minister Ehud Barak said he wasn't happy with Egypt's diplomatic move and that it did not contribute to Egypt's role in the peace process.
The diplomatic blows came as new attacks fueled a spiral of violence in this seaside strip. An Israeli teen-ager and a Palestinian security officer were shot and killed in incidents just a few hours apart.
After nightfall, Israeli military transporters were seen delivering tanks and armored personnel carriers to army bases in Gaza.
''I don't want to delude anyone. We are not on a picnic,'' Barak said while visiting Israeli army headquarters in Gaza. ''We are in a struggle. If we have to fight, we will know how to fight. ''
The trouble again focused on the area near Kfar Darom, an isolated Israeli settlement where a bomb went off near a school bus Monday, killing two Israelis and wounding nine, including five children. Israel retaliated for that attack with punishing rocket attacks Monday night that wounded more than 60 people.
At midday Tuesday, Israeli soldiers opened fire and killed a Palestinian intelligence officer who they said was approaching the guard post in a suspicious manner. The army said the officer was armed, but did not open fire.
A few hours later, an 18-year-old Israeli motorist from a settlement was driving on a nearby road when Palestinian gunmen opened fire, hitting him in the head and critically wounding him. He died later at Soroka Hospital in the Israeli town of Beersheba.
The violence was not limited to Gaza. In the West Bank town of Jenin, a Palestinian was killed by Israeli fire in a rock-throwing clash, Palestinian doctors said. The army said it fired only tear gas.
Nearly 250 people have died in almost two months of fighting, with young Palestinians accounting for the vast majority of the dead.
Egypt's unexpected announcement that it was recalling its ambassador to protest Monday's rocket attacks on Gaza was a sharp blow to Israelis. The ambassador, Mohammed Bassiouny, was to leave Wednesday.
Along with the United States, Egypt has been one of the few countries that both Israel and the Palestinians have been willing to talk to during the recent crisis. With Egypt's diplomatic rebuke, the channels for communication have narrowed.
''Of course I am not happy about the Egyptian decision,'' Barak said. ''Egypt has a role to play in the peace process, a positive role, and I don't think that the decision to recall the ambassador contributes to continuation of this positive role.''
In Cairo, Egyptian Foreign Minister Amr Moussa told reporters that Egypt had not abandoned the peace process or ruled out future contacts with Israel.
''If there is a meaningful idea or proposal, we shall work on it,'' Moussa said.
Nevertheless, the prospects for ending the turmoil were bleak, and the hope of restarting peace negotiations appeared ever more distant.
Jordan, which signed a peace treaty with Israel in 1994, will not install a new ambassador in Tel Aviv, said Prime Minister Ali Abu-Ragheb. He rejected what he called Israel's attempt to ''justify its attacks'' by charging that Yasser Arafat's Palestinian Authority was responsible for the school bus bombing.
''The peace process is clinically dead now,'' said the chief Palestinian negotiator, Ahmed Qureia.
With words of anger, Palestinians on the street vowed to press on with their uprising.
In Gaza City, hundreds of Palestinians streamed in and out of a rocket-damaged building in what served as the Gaza headquarters of Fatah, Arafat's political movement.
Music blared from a truck in the street, and young men planted Palestinian flags on the shattered second floor, where the outside wall had collapsed, leaving dangling pieces of concrete above and shards of glass that crunched underfoot.
''This intefadeh (uprising) comes from seven years of negotiations that have given the Palestinian people nothing,'' said Mohammed Dahlan, the Palestinian security chief in Gaza.
The defiant mood contrasted with the dazed atmosphere at the humble al-Hassani residence, in the Shati refugee camp near Gaza's Mediterranean seafront.
A screaming rocket had crashed through the corrugated fiberglass roof Monday night, wrecking an empty bedroom and lightly injuring three of the family's nine children.
''We never expected to be shot at by the Israelis,'' said the mother, Gamla al-Hassani, 38. ''We are all civilians. There are no police stations nearby.''
The missile strike appeared an Israeli misfire - the nearest potential Palestinian security target was a police station at least a half-mile down the street in the densely packed refugee camp.
Though the rubble could have been removed by hand, the family left it untouched, a testament to the trauma of the night. Mixed with the lumps of cinderblock were blankets and clothes, a baby doll and a mangled sewing machine.
