BETHLEHEM, West Bank, March 12 (Reuters) - Israeli forces killed four Palestinian militants in the occupied West Bank on Wednesday, hours after the Gaza Strip's Hamas rulers demanded a halt to all Israeli "aggression" as a condition for a ceasefire.
A source in Islamic Jihad, which lost three men including a local leader, in the Bethlehem raid, vowed revenge. Hamas said such Israeli attacks risked killing off any chance for calm.
Islamic Jihad is among militant groups that mediator Egypt had hoped to coax into halting rocket fire from Gaza in a bid to bolster U.S.-sponsored peace talks between Israel and the Western-backed Palestinian president, Mahmoud Abbas.
The official Palestinian news agency WAFA quoted Abbas's administration as calling the Bethlehem killings "an ugly crime" and warning Israel of unspecified "consequences".
As part of any truce, Islamist Hamas -- which seized control of Gaza in June after routing Abbas's forces there -- is demanding a say in the future functioning of the coastal territory's border crossings, a condition rejected by Israel.
"There must be a commitment by Israel to end all acts of aggression against our people, assassinations, killings and raids, and lift the (Gaza) siege and reopen the crossings," Ismail Haniyeh, leader of Hamas's administration in Gaza, said in a speech.
A truce, he said, should be "reciprocal, comprehensive and simultaneous", approved by other factions, and apply to Gaza and the West Bank -- territories where Palestinians seek statehood.
Hamas official Sami Abu Zuhri said his group had made its demands during a meeting with the Egyptians -- who have been speaking separately with Israel -- and hinted that the West Bank raids could be seen by Palestinians as a rejection of the terms.
"The Occupation (Israel) showed it was not interested in calm, and under these conditions we will continue to protect our people against the aggression," Abu Zuhri told Reuters.
BARAK SEES "TOUGHER RECKONING"
Before the Bethlehem killings, Israel appeared to rebuff the idea of halting West Bank operations, arguing that they are necessary to thwart attacks by Hamas and other groups.
"There is nothing," Israeli Defence Minister Ehud Barak told political supporters, referring to speculation that a halt to the fighting was imminent. "We'll witness more difficult things yet, an even tougher reckoning, before we get to the calm stage.
Witnesses in Bethlehem said Israeli commandos disguised as locals and riding in a taxi with Palestinian licence plates drove up to a car full of militants and sprayed it with bullets.
Reuters Television footage showed three dead men, sprawled out and bloody in the shattered vehicle. Another man lay on the tarmac as Palestinian passersby tried in vain to revive him.
The Israeli military confirmed it had carried out the raid, saying its forces intended to arrest the Palestinians but opened fire after seeing that three of them had assault rifles.
The Islamic Jihad members, a military spokeswoman said, "took part in terrorist attacks in which there were many Israeli casualties".
Palestinian officials identified one of the Islamic Jihad dead as the group's local leader. The fourth militant belonged to al-Aqsa Martyrs Brigades, an armed wing of Abbas's Fatah.
Earlier on Wednesday, Israeli troops killed an Islamic Jihad militant in the West Bank town of Tulkarm.
Gazan rocket salvoes have tailed off since Israel ended an offensive in the territory nine days ago that killed 120 Palestinians. Israel has not raided the area since.
Egypt has stepped up truce efforts -- amid Israeli leaders' insistence they are not negotiating with Hamas, which is shunned by the West for calling for the Jewish state's destruction.
Israel tightened its Gaza border restrictions after the Hamas takeover there, making life harder for ordinary Gazans. Israel is under international pressure not to cause the Gaza Strip's 1.5 million inhabitants more hardship. (Additional reporting by Nidal al-Mughrabi in Gaza and Mohammed Assadi in Ramallah, Writing by Adam Entous and Dan Williams in Jerusalem, Editing by Tim Pearce)