Jerusalem ? Israel’s Security Cabinet endorsed a plan to gradually reoccupy Palestinian land until attacks on Israelis stop, a major shift in its strategy after an especially bloody week in the 21-month-old conflict.

As the army readied for what military officials said would be a wide-scale offensive, a military spokesman said a tank crew had erred Friday in shelling Palestinian curfew violators, killing three children and a teacher.

Palestinian suicide bombings, a shooting at a Jewish settlement and Israeli military strikes killed 33 Israelis and 16 Palestinians this week. The attacks delayed plans by President Bush to deliver a speech outlining U.S. recommendations for Mideast peacemaking.

As they returned from funerals for attack victims on Friday, Israeli settlers rampaged through the West Bank village of Hawara, killing a Palestinian man and torching a home and a car, villagers said.

Israeli police arrested a 27-year-old Jewish settler in connection with the shooting death in Burein village near Nablus. But police said the investigation was hampered because the Palestinians did not want to turn over the body.

The Security Cabinet of Prime Minister Ariel Sharon met Friday and upheld the harsher policy of permanently occupying Palestinian land.

“We will act more intensively, more deeply … because the terrorism is more intense, deeper and more rooted. No one else is stopping it,” said Israeli Defense Ministry spokesman Yarden Vatikai.

Israel Radio said that while a major operation was in the offing, officials did not believe it would match the scale of the massive, six-week military campaign launched in March which shattered Palestinian infrastructure, kept Palestinian leader Yasser Arafat imprisoned in his battered headquarters and arrested or killed scores of wanted militiamen.

However, Amos Yaron, director general of the Defense Ministry, said in an interview on Israel Radio Saturday that the military was preparing a “crushing and decisive” response to the attacks.

“We have to take much more massive action than we have up until now. If this entails entering the territories and staying there a long time, then we will have to consider it,” he said.

The Israeli settlers allegedly went on the rampage in Hawara after burying a mother and three of her sons, killed when a Palestinian gunman infiltrated the nearby settlement of Itamar on Thursday night.

In line with Israel’s new reoccupation policy, about 50 Israeli tanks entered Nablus, the West Bank’s largest city, after the Itamar infiltration. Israeli forces had previously settled in to Jenin, after a suicide bombing in Jerusalem Tuesday killed 19 Israelis .

In Jenin, rumors of a brief break in a 3-day-old military curfew sent residents rushing to the market to replenish supplies on Friday. When troops searching the area for an explosives laboratory spotted a group of Palestinians heading toward them in violation of the curfew, a tank fired two shells to deter them, the army said.

The army spokesman’s office said an initial inquiry “indicates that the force erred in its action,” and that an investigation was in progress.

Jenin hospitals identified the dead as Ahmed Ghazawi, 6; his 12-year-old brother Jamil; Sajedah Famahwi, 6; and Helal Shetta, a schoolteacher who was about 50.

Another 24 people were wounded in the incident, many of them children, hospital officials said.

Palestinian residents, security and hospital officials said tanks fired shells and soldiers fired machine guns in three separate areas: two market streets and a nearby neighborhood.

Asked about the Jenin shooting, Arafat aide Nabil Abu Rdeneh said Israel’s policy of reoccupying Palestinian areas endangered peace prospects. He urged Washington to step in. “Israel is taking advantage of this American absence and this American green light,” Abu Rdeneh said.

In Washington, U.S. State Department spokesman Richard Boucher said “we would expect the Israelis to look into this kind of tragic incident.”

Jenin was calmer Saturday, with Israeli tanks withdrawing from an area near a high school so students could take final exams. In Bethlehem, shoppers jammed the dusty streets after a curfew was lifted for three hours. Fire from an Israeli tank damaged the gate to An-Najah University in Nablus, but no casualties were reported.

In the attack on Itamar, a Palestinian armed with grenades and assault rifles entered the Shabo family home, killing Rachel Shabo, 40; and her sons Neria, 16; Zvi, 12; and Avishai, 5.

The settlement’s security chief, who rushed to the scene, also was killed before Israeli commandos stormed the house and killed the infiltrator.

A small, radical Palestinian faction, the Popular Front for the Liberation of Palestine, claimed responsibility for the attack.