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GAZA CITY, Gaza Strip (AP) _ Israeli patrol boats and tanks tried to block a suspected arms shipment at sea from reaching the Gaza Strip on Wednesday, and witnesses said clashes elsewhere in the region left two Palestinians dead.

Israeli tanks fired cannons and machine guns at large metal tubes thought to contain arms or ammunition that were floating in the Mediterranean Sea. Helicopters hovered overhead and naval patrol boats scoured the sea. One container blew up when it was hit by fire.

Israel did not say whom the arms belonged to, but its forces have in the past intercepted arms shipments that had been lowered into the sea from ships to be picked up by Palestinian fishing boats, the military said.

On Wednesday, Israeli troops shot and killed a Palestinian vegetable vendor who was riding his bicycle on farmland near the Gush Katif Jewish settlements in Gaza, witnesses said. The army said soldiers ordered the man to halt and fired warning shots before shooting him dead.

In Jenin refugee camp, a 34-year-old man identified as Mohammed Amouri was killed by Israeli tank fire inside his home, witnesses said. Palestinian gunmen fired on four Israeli tanks patrolling the camp, and Amouri was hit in the head by troops returning fire, the witnesses said. There was no immediate comment from the army.

Late Tuesday, Palestinians fired a mortar shell at a home in a Jewish settlement in Gaza and hit the top floor, the military said. The family in the house was unhurt.

Despite the incidents, Palestinian forces began setting up checkpoints in the Gaza Strip on Wednesday to show they are capable of maintaining order as part of an agreement on Israeli troop withdrawals, Palestinian officials said.

However, Israeli Defense Minister Binyamin Ben-Eliezer postponed a meeting planned for Wednesday with the Palestinian security chief, Interior Minister Abdel Razak Yehiyeh, to discuss the next stages of the deal, Palestinian officials said.

Israel's Defense Ministry said the postponement was because of the mortar shelling and other violent incidents in Gaza.

``The defense minister has made it clear to the Palestinians that he expects from them vigorous action to halt terrorism and violence, as well as smuggling by sea and on land,'' a ministry statement said. It added, however, that Ben-Eliezer ``intends to continue'' with the security agreement.

Also Wednesday, U.S. Deputy Assistant Secretary of State David Satterfield arrived in the West Bank to discuss reform of Palestinian civil society, security cooperation between Israel and the Palestinians and an eventual return to direct peace talks, a U.S. diplomat said on condition of anonymity.

Palestinian Cabinet Minister Saeb Erekat confirmed that he met with Satterfield Wednesday morning in the West Bank town of Jericho. He said he told the U.S. envoy that Israel must end its occupation of Palestinian territories.

Palestinians charge Israel is stalling implementation of a plan to gradually withdraw troops from Palestinian areas as a way of easing tensions after nearly two years of fighting. Israel counters that the Palestinians have yet to take steps to stop attacks.

On Aug. 18, Ben-Eliezer and Yehiyeh reached an agreement to use Gaza and the West Bank town of Bethlehem as test cases: If Palestinians could prevent attacks on Israelis originating there, Israel would ease restrictions in other parts of the West Bank.

On Wednesday, dozens of Palestinian children and teenagers threw stones, plastic chairs and garbage at two Israeli tanks patrolling in the West Bank town of Jenin.

The children climbed atop one of the tanks and started throwing some equipment on the ground, witness said. One of the children was slightly injured when he fell off the tank, which fired its heavy machine gun, the witnesses said.