Israel's network of roadblocks will remain in place across the West Bank, the defense minister said Tuesday, sparking an outcry from Palestinians who say they cannot rebuild their economy until people and goods move freely.

Defense Minister Ehud Barak's comments soured an already tense atmosphere between Israel and the Palestinians just days before President Bush's first visit to the region as U.S. president. Israeli construction in east Jerusalem and the West Bank and violence between Israelis and Palestinians _ and among Palestinians themselves _ threaten to overwhelm Bush's peace efforts.

In a newspaper interview ahead of the visit, Israeli Prime Minister Ehud Olmert said for their own good, Israelis must consider giving up much of the West Bank and part of Jerusalem to the Palestinians.

Jan. 1 is the day Palestinian President Mahmoud Abbas' Fatah movement celebrates its anniversary, but in Gaza, Hamas rulers banned fireworks and marches _ setting off clashes that killed eight people and wounded more than 60. It was the worst outbreak of infighting since Nov. 11, when Hamas forces opened fire at a huge Fatah rally, killing eight.

The eight dead Tuesday included three Hamas and three Fatah supporters, officials said. Also killed were an elderly man caught in a crossfire in northern Gaza and a 14-year-old Hamas supporter shot in the southern town of Khan Younis after he left a mosque, relatives said.

By nightfall Tuesday, the internal fighting had died down. But before dawn Wednesday, an Israeli operation in central Gaza strip killed six militants, Hamas and Palestinian medical officials said. At least four of those killed were Hamas militants, including a local field commander, Hamas said. Five gunmen were wounded, the group said.

The Israeli army confirmed that troops had operated for a few hours in the area near Gaza City and that they had fired, together with Israeli aircraft, at gunmen who shot anti-tank missiles toward the soldiers. The soldiers withdrew shortly after sunrise. The troops were operating "against the terror infrastructure" in the area, the army spokesman said.

The Israeli army conducts almost nightly raids into the Gaza Strip against Palestinian militants who launch rockets into southern Israel. Dozens of militants have been killed in such operations recently, but Wednesday's toll was the highest in recent days.

Another Hamas militant was killed in an earlier Israeli attack in Gaza, Palestinians said. The Israeli military said it targeted armed Palestinians.

Late Tuesday, Israeli security released a statement saying two gunmen who killed two Israeli hikers in the West Bank on Friday were Fatah activists, a disclosure that could further complicate peace moves. Abbas is the local leader of Fatah. The statement said the two surrendered to Palestinian police to avoid arrest by Israel.

Removing roadblocks is a constant Palestinian demand, and Israel has pledged several times to take down some of the dozens of checkpoints that have choked economic and social life in the West Bank. Israel erected the roadblocks after the Palestinian uprising erupted in 2000, when attackers crossed into Israel.

On Tuesday, however, Barak said the roadblocks have proven effective against Palestinian attacks.

"There is no chance of effectively fighting terror without practical daily control in the field, and the roadblocks will stay," Barak said.

Palestinian negotiator Saeb Erekat said Barak's comments were "very unfortunate."

"I don't think we can do anything about the economy of improvement of life or revival of institution-building" as long as the roadblocks remain, Erekat said.

Barak has ordered the removal of two dozen dirt embankments and two of the 16 major West Bank checkpoints since he became defense minister in June, but the Palestinians say that has not made a significant change.

Olmert called for Israeli concessions.

Even Israel's closest international allies want it to pull back in the West Bank and share Jerusalem, Olmert said in an interview published Tuesday.

When speaking of the future, "the world that is friendly to Israel ... speaks of Israel in terms of the '67 borders. It speaks of the division of Jerusalem," Olmert told the English-language Israeli daily The Jerusalem Post.

Israel captured the West Bank, east Jerusalem and the Gaza Strip in the 1967 Mideast war. Palestinians want those territories for an independent state, with east Jerusalem as its capital.

Olmert said Israel had to withdraw from Palestinian territory to preserve itself as a democracy and as a predominantly Jewish state.

"What will be if we don't want to separate?" Olmert said. "Will we live eternally in a confused reality where 50 percent of the population or more are residents but not equal citizens who have the right to vote like us?"

About 5.4 million Jews live in Israel alongside 1.4 million Israeli Arabs. Another 3.9 million Palestinians live in the West Bank and Gaza Strip. Israel pulled out of Gaza in 2005.