Jerusalem ? Israeli forces backed by 15 tanks and attack helicopters entered the city of Khan Younis in southern Gaza early today and two Palestinians were slightly wounded in exchanges of gunfire with troops, witnesses and hospital officials said.

The Israelis knocked down an exterior wall around a hospital, witnesses said. The Israeli military confirmed that an operation was in progress, noting that several Palestinian attacks originated from Khan Younis recently. An Israeli soldier was killed by a sniper there Wednesday.

Separately, Palestinian leaders on Saturday moved closer to amending a law so a prime minister could be appointed — one of many reforms demanded by the United States and Israel but a change that Palestinian leader Yasser Arafat may resist.

The Palestinian Legislative Council agreed to meet later this month to amend Palestinian Authority law and create the position of prime minister. Council members also were expected to determine the responsibilities of the new post.

The council would meet March 8-12, said Nabil Abu Rdeneh, an aide to Arafat.

“President Arafat has accepted the idea of nominating a prime minister,” Abu Rdeneh said, adding that arrangements are being made with Israeli authorities to allow safe passage for members to meet. It has been more than a year since the council met face-to-face and — because of travel restrictions — some members have had to meet via teleconference.

Israel has said it would allow the meeting but would prohibit members suspected in attacks against Israelis from attending.

Even if the meeting occurs, deliberations are expected to take some time. And Arafat — who is under increasing international pressure to name a prime minister — may postpone the appointment, said a Palestinian Authority official, who asked not to be identified.

Salam Fayad, the Palestinian’s top finance leader, on Friday released a lengthy report on Palestinian finances and detailed $600 million in liquid assets in 79 ventures. He denied that Arafat held secret accounts and said no funds had gone to terrorist activities.

The disclosure was one of several moves demanded by the United States and Israel.

Arafat, meanwhile, spoke via video at the Arab League summit in Egypt. Declaring that Israel was being ruled by extremists, Arafat said the Jewish state was waging war against Palestinians and “against all the Arab nations.”