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JERUSALEM (AP) _ Israeli soldiers killed a Palestinian toddler and wounded two others in Gaza Monday, hospital officials and witnesses said. The shooting came as Israeli leaders weighed a military response to a Palestinian shooting rampage that killed five people, including a mother and her two young sons.

In the second straight day of violence to take children's lives, the 2-year-old boy was killed shortly after 7 p.m. while he played ball in Rafah. Israel's army said forces had returned fire and knew of no casualties, while the boy's uncle said there had been no fighting in the area.

Meanwhile, expectation mounted of an Israeli operation in the West Bank city of Nablus, where Israeli officials said Sunday's shooting rampage in Kibbutz Metzer _ a community that symbolized Jewish-Arab coexistence _ had been planned.

Al Aqsa Martyrs Brigades, which are allied with Yasser Arafat's Fatah group, claimed responsibility for the kibbutz attack. Israel said it showed the insincerity of the Palestinian leader's recent condemnations of attacks on civilians, but Palestinians maintained the shooting was carried out by rogues and Arafat promised an investigation.

Either way, the violence bodes ill for the mission of U.S. envoy David Satterfield, who arrived Monday to promote a plan for restarting Mideast peace negotiations and establishing a Palestinian state with provisional borders by next year.

Satterfield was to meet Monday with other representatives of the so-called Quartet backing the plan _ the United States, Russia, the European Union and United Nations.

But notions of renewing peace talks seemed a world away from the daily grind of deadly violence, which two years of myriad Israeli military measures have failed to quell _ and the killing of the boy in Gaza was sure to further inflame passions.

Officials at Rafah Hospital officials said 2-year-old Nafez Mashal died from a bullet wound to the back. They said two other children, ages 8 and 14, were moderately wounded.

The dead boy's uncle said there was no fighting going on at the time he was killed. ``The boy was playing with a small ball _ suddenly we came under fire,'' said Mohammed Mashal, the uncle. ``When we looked toward the boy we found him lying on the ground in a pool of his blood.''

The army, which maintains an observation post on the nearby border with Egypt, said it shot in response to shooting by Palestinians and was unaware of casualties. In the past, Israeli troops responding to Palestinian gunfire and grenade attacks have hit Palestinian civilians.

Earlier in the day, an angry Prime Minister Ariel Sharon and Defense Minister Shaul Mofaz toured stricken Kibbutz Metzer, including the bedroom of Noam Ohion, 4, and brother Matam, 5, slain with their mother Revital while _ neighbors said _ reading a bedtime story.

A weeping Avi Ohion, ex-husband of the mother and father of the boys, described how Noam would only go to sleep with one pacifier in his mouth and another in his hand. ``How can a man _ if you can call him a man _ shoot a boy with two pacifiers and kill him? ... Three entire worlds have disappeared. They loved life so much.''

Sharon spokesman Raanan Gissin said the Israeli response will be ``within the parameters'' of other recent actions _ seeming to rule out the expulsion of Arafat, even though the government's top decision-makers, Sharon, Mofaz and Foreign Minister Benjamin Netanyahu, have supported the idea.

Netanyahu _ who is challenging Sharon for the Likud Party leadership primary in hopes of emerging as prime minister after a scheduled January 28 general election _ on Monday repeated his long-standing call for ``expelling Arafat's terror regime'' but said the timing should be chosen carefully.

The main obstacle to Arafat's expulsion appears at the moment to be continued U.S. opposition, at a time when Washington prepares for possible war with Iraq and wants to avoid antagonizing the Arab world.

A senior Israeli military official said Israel knew the shooter and his accomplices came from the West Bank town of Tulkarem, but were dispatched by militants in Nablus. The official, who spoke on condition of anonymity, said he believed Fatah decided to resume attacks in Israel and not just limit them to soldiers and Jewish settlers in the West Bank and Gaza.

However, Fatah distanced itself from the Metzer attack. The group said it condemns attacks on civilians and will help with the internal investigation.

Palestinian Information Minister Yasser Abed Rabbo said he saw the shooting as ``a crime.''

The gunman had crawled under Metzer's chain-link perimeter fence just before midnight Sunday _ hours after a car exploded nearby, killing its two Palestinian occupants in what police believed was a failed suicide bombing.

He reached the center of the community and shot the three members of the Ohion family in their house. According to kibbutz member Doron Lieber he proceeded to the communal dining room where he met a couple taking a walk, killing the woman as the man fled, and then he killed kibbutz mayor Yitzhak Dori, who had pulled up in his car, before fleeing by again crawling under the fence.

The attack came on the same day that Fatah officials and the militant Hamas group launched talks in Cairo. Fatah officials have said they were going to demand that Hamas halt attacks inside Israel. Hamas says it will continue attacks.

Throughout the West Bank, Israeli troops have been in or near Palestinian cities for nearly five months, having invaded after a wave of suicide bombings in Israel.