In the central West Bank town of Ramallah, where Palestinian leader Yasser Arafat (news - web sites) has been stranded for over two years, the Israeli army raided three banks and a local medical organization in what it said was an operation to seize the illegal funds of militant groups.
"We have decided to shorten the length of the fence by 80 kilometres" in the northern West Bank, the sources said, pointing out the move will reduce the overall length to 640 kilometres (390 miles).
It was the second move in four days to reduce the overall length of the barrier and was clearly timed to coincide with hearings on its legality at the International Court of Justice (ICJ) in The Hague (news - web sites) that closed Wednesday.
Earlier this week, Israeli troops began dismantling an eight-kilometre section that encloses the Palestinian town of Baka al-Sharkiya, inside an enclave also in the northern West Bank.
According to military sources, troops will remove another kilometer-long section which lies to the east of Qalqilia to ease travelling conditions for Palestinians.
Another 20-kilometre stretch, planned to run between the villages of Al-Mutilla and Taysir in the northeastern corner of the West Bank, is also to be scrapped.
Israel will likewise call off plans to dig a series of trenches to the northwest of Jerusalem that would have fenced off thousands of Palestinians into a complex network of enclaves.
But at the same time troops worked for the second day in a row on a 42-kilometer (25-mile) section in the village of Beit Furik, south of Ramallah, sparking clashes with residents who tried to stop fertile land being razed.
Meanwhile, deliberations in The Hague over the controversial barrier drew to a close after the Arab League and the Organisation of the Islamic Conference gave testimony against the project.
The Israeli government has boycotted the ICJ hearings, though it has made written submissions, arguing the case is beyond the court's competence.
The UN General Assembly called on the ICJ in December to give an opinion on the legality of the barrier. No date has been set for the court to release its findings, although any verdict will be merely advisory.
An intricate montage of barbed-wire fences, deep trenches and towering concrete walls, the controversial barrier often juts deep into Palestinian territory, cutting local residents off from schools, hospitals and places of work.
Israel says its only purpose is to prevent infiltrations by Palestinian militants, but the Palestinians view it as a blatant landgrab and an attempt to pre-empt the border of their future state.
Israeli security sources said the Ramallah raid was to confiscate funding for terrorism" as part of the "global war on terror financing".
Troops converged on the Arab Bank and the Cairo-Amman bank in downtown Ramallah, breaking into their computer rooms, Palestinian security sources said.
In Al-Bireh neighbourhood, soldiers entered another branch of the Arab Bank and surrounded the nearby International Palestine Bank, but did not enter it.
Soldiers also barged into the offices of the Union of Palestinian Medical Relief Committees, headed by rights activist Mustafa Barghuti, and carried out a search, employees told AFP.
The move provoked fierce clashes between soldiers and stone-throwing youths, with the army beating some of them and using rubber bullets and tear-gas to disperse the crowd.
Medics said 16 people were wounded, one sustaining a chest wound and requiring an operation.
Also in Ramallah, senior officials from Arafat's Fatah (news - web sites) movement were due to meet late Wednesday to examine the implementation of reforms within the movement itself and within the Palestinian Authority (news - web sites), an official said.
In separate developments, the army said it had opened an inquiry after soldiers torched a tent sheltering the family of a Palestinian suicide bomber whose house was destroyed by troops.
The four-room house in the southern West Bank village of Hussan near Bethlehem was home to 13 people, apart from Mohammed Zuhul who blew himself up on a Jerusalem bus Sunday killing eight Israelis and wounding scores of others.
