Jerusalem ? The Israeli army shot and killed one of Israel’s most wanted men from the militant group Islamic Jihad on Saturday in a gunfight in the West Bank, security officials said.

The group retaliated with a roadside bombing near a Jewish settlement in the Gaza Strip, killing an Israeli soldier.

Iyad Sawalha, a man Israel has accused of orchestrating attacks that left 31 Israelis dead, was killed after trading fire with troops from his hideout in the West Bank town of Jenin, Israeli officials said, speaking on condition of anonymity.

Sawalha, a top Islamic Jihad leader in the northern West Bank, threw grenades and fired at troops after holing up behind a moveable wall in the hideout leading to an underground cave, the officials said. Two soldiers were lightly injured, the army said.

In retaliation, Islamic Jihad said its militants set off a bomb later Saturday on a road near a Jewish settlement in the Gaza Strip, killing an Israeli soldier. In a statement, the group said the attack was its first retaliation for the death of Sawalha.

The army said the 23-year-old soldier was killed while on a foot patrol near the Netzarim settlement when the roadside bomb detonated. The explosion also moderately wounded a second officer.

An Israeli soldier searches in the house of Iyad Sawalha, a senior militant of the Islamic Jihad in the West Bank town of Jenin. Sawalha was killed Saturday in an Israeli army operation. He was accused by Israel of orchestrating attacks in which 31 Israelis were killed.

In the Jenin operation, Israeli forces conducting a search of the city’s casbah identified the house as Sawalha’s hideout after finding papers on the doorstep that appeared to belong to his wife, Mariam, the officials said.

Next-door neighbor Soha Ekmel, a witness, said she heard Sawalha’s wife scream for him to come out, telling him that the Israeli forces had threatened to kill her if he did not. The army declined to comment on that report.

Palestinian leader Yasser Arafat criticized the operation, which fell during the Muslim holy month of Ramadan.

“It is a very big crime that was committed, through military aggression against our people and against our (religious) holidays,” Arafat said.

Israel reoccupied Jenin almost three weeks ago in a bid to crack down on militant groups after an Oct. 25 suicide bombing.

The army says Sawalha was responsible for two suicide attacks ” a bus bombing in June that killed 17 Israelis, and another last month when two teenagers drove a car laden with explosives into a bus in northern Israel, leaving 14 Israelis dead.