West Bank killing of two Palestinian gunmen, Israeli army officer raises new concern in Washington

RAMALLAH, West Bank, Sept 14 (Reuters) - Two Palestinian gunmen, one of them a member of a U.S.-backed security service, killed an Israeli army officer and were shot dead by his unit on Wednesday in an incident that stirred fresh worry in Washington.

Assistant Secretary of State Barbara Leaf said the United States was greatly concerned about security and economic conditions in the West Bank and that it seeks to ensure that security cooperation between Israel and the Palestinian Authority (PA) remains.

"Our part in this is to ensure to the greatest degree possible that security cooperation is robust and continuing," she said in a briefing call on Wednesday.

Israeli Prime Minister Yair Lapid called the incident an escalation after confirming that one of the Palestinian men was a preventive intelligence officer in the PA.

"Wherever the Authority does not maintain order, we will not hesitate to act," he said in a statement.

The Palestinian Authority has not publicly responded to the incident but has previously condemned Israel's operations in the West Bank.

The PA security forces were set up in the 1990s with U.S. funding and training to help the Authority keep order and stave off threats from Islamist rivals. Funding has tapered off but there is still some coordination between the PA security forces and Washington.

Violence has surged in the West Bank in recent months as Israel has intensified raids following a spate of lethal Palestinian street attacks in its cities.

Dozens of Palestinians have been killed by Israeli forces in the West Bank since the start of the year, the Palestinian health ministry said.

Before dawn on Wednesday, an Israeli military spokesman said, troops intercepted two men spotted approaching an Israeli barrier along the West Bank boundary near Jenin, a Palestinian town that has been the site of near-nightly friction between the sides.

The men opened fire, killing an army officer, and were shot dead by the other troops, the military said.

The Jenin Brigade, a coalition of armed Palestinian factions, claimed the two dead gunmen as its members and confirmed they had killed an Israeli army officer.

The father of one of the Palestinians killed told Palestine TV that the Israeli army was holding their bodies, and he demanded their return for burial.

Israel's Defence minister, Benny Gantz, decided to keep the crossing where the incident occurred closed and to freeze entry permits for the Palestinian residents of Kufr Dan, the village the gunmen were from, according to a statement by COGAT, the Israeli defence ministry's liaison office to the Palestinians.

U.S.-sponsored Palestinian statehood talks with Israel stalled in 2014. Since then, the domestic credibility of the PA, created under 1990s interim peace accords to wield limited self-government in the West Bank, has waned.

Israel has called on the PA to crack down on hotspots like Jenin. PA officials accuse Israel of having weakened their rule.

Writing by Dan Williams and Ali Sawafta; Additional reporting by Humeyra Pamuk; Editing by Raju Gopalakrishnan, Mark Heinrich and Matthew Lewis

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