GAZA CITY, Gaza Strip (AP) _ Shouting for vengeance, more than 2,000 Islamic militants marched in a funeral procession Thursday for a leader whose death they blamed on Israel.

Mahmoud Khawaja, 34, a senior figure in Islamic Jihad, was killed in a drive-by shooting earlier Thursday as he worked in an alley in the Shati refugee camp.

Islamic Jihad, a group with a few thousand followers, has been trying to derail Israel-PLO autonomy negotiations with suicide bombings and shooting attacks in Israel. On Thursday, it blamed the Khawaja killing on Palestinian collaborators and threatened revenge attacks against Israel.

Amid shouts of ``Death to Israel!'' and ``We will send more suicide bombers!'' the angry mourners fell in step behind Khawaja's coffin, which was draped in a green Islamic banner, as the procession wound its way through the streets of Gaza City.

``We promise God and our people that (Israeli Prime Minister Yitzhak) Rabin will pay for the crime of today more than he imagined, with the blood of his soldiers and the future of the Israeli state,'' said an Islamic Jihad leaflet sent to news agencies.

The threats came as Israeli and Palestinian negotiators were trying to meet a July 1 deadline to agree on an Israeli troop withdrawal from the West Bank and Palestinian general elections. Rabin has warned that the peace talks would collapse if any more Israelis were killed by Muslim militants.

Yasser Arafat's spokesman, Marwan Kanafani, condemned the killing and said there would be an investigation.

Khawaja served more than 10 years in Israeli prisons as a leader of Islamic Jihad's military wing. He was questioned twice by Arafat's security forces in recent months.

Witnesses said Khawaja was working Thursday morning as a garbage collector for the U.N. Relief and Works Agency when a car drove up with three men inside, two of them masked. One of the masked men opened fire from a pistol fitted with a silencer, killing Khawaja immediately.

The killing, which came after months of relative calm in Gaza, was the second assassination of an Islamic Jihad leader in seven months. On Nov. 2, another top official, Hani Abed, was killed by a car bomb.

Palestinian police say they are holding several suspected collaborators who confessed they received orders from Israel's Shin Bet security service to kill Abed.

Islamic Jihad carried out three bloody attacks to avenge Abed's death, including a Jan. 22 suicide bombing that killed 21 Israelis.