RAMALLAH, West Bank ? Dozens of Israeli tanks Wednesday patrolled the deserted streets of this key West Bank city, waging sporadic firefights with bands of Palestinian gunmen. Hours later, Palestinians said the Israelis had begun pulling out after the two-day incursion.

The Israeli military would not confirm that a pullout was under way. Military sources said there was some movement of forces.

A pullback would signal the easing of a major operation in Ramallah and of intense military pressure on the Palestinians just hours ahead of a new U.S. peace effort.

On Wednesday, Israeli forces and bands of Palestinian gunmen clashed on the nearly deserted streets, leaving a senior Palestinian security officer, an Israeli soldier and an Italian photographer dead.

In the Gaza Strip, Israeli soldiers shot and killed a Palestinian after he opened fire on an Israeli vehicle. Late Wednesday, two Palestinians entered Nahliel, a Jewish settlement northwest of Ramallah, and stabbed a settler, seriously wounding him, settlers and the military said.

Israel’s operation in Ramallah was part of its most expansive military operation since its invasion of Lebanon in 1982. Army chief Lt. Gen. Shaul Mofaz told a parliamentary committee Wednesday that about 20,000 Israeli soldiers were stationed in the West Bank and Gaza Strip.

Around the same as the Ramallah pullback, witnesses in Bethlehem said two Israeli tanks moved up a main road in the West bank town as armored vehicles took up positions in the adjacent Aida refugee camp.

Palestinians cautiously welcomed a U.N. Security Council resolution endorsing a Palestinian state. Israel praised elements of the measure, but refrained from commenting directly on the statehood issue.

International diplomatic efforts have mounted as the Mideast endures its bloodiest stretch since fighting erupted in September 2000. However, there is widespread skepticism that they can quickly reverse the momentum of recent fighting, which has included multiple Palestinian suicide bombings and a half-dozen Israeli incursions into Palestinian towns and refugee camps.

More than 160 people have been killed on the Palestinian side and almost 60 have been killed on the Israeli side in March.

Many Israelis favor the tough military action against the Palestinians launched by Prime Minister Ariel Sharon, including the current mission. But in a stormy Cabinet session Wednesday, Sharon and Defense Minister Binyamin Ben-Eliezer exchanged heated words about how to conduct operations, Israeli media reported.

Sharon said the Cabinet had agreed that Israel should maintain continuous military pressure on the Palestinians for now and accused Ben-Eliezer of halting a number of military operations in Ramallah, the reports said, adding that Ben-Eliezer threatened to resign at one point.