Egypt began closing its breached border with the Gaza Strip on Friday, using barbed wire and water cannons to keep Palestinians from leaving the Hamas-controlled territory in defiance of an Israeli blockade.

Israeli air strikes overnight killed four Palestinian militants in the southern Gaza town of Rafah, where Hamas blasted open the border wall on Wednesday, letting tens of thousands rush across to stock up on goods in short supply in the impoverished strip, home to 1.5 million people.

The fall of the Rafah wall punched a new hole in a U.S.-backed campaign to curb the clout of Hamas and strengthen that of Palestinian President Mahmoud Abbas, nearly eight months after the Islamist group routed Abbas's Fatah forces in Gaza.

Israel said it had tightened its Gaza blockade last week to counter cross-border rocket fire, but after an international outcry, fuel and aid supplies were partially restored.

Israeli officials said Abbas, whose authority is largely limited to the occupied West Bank, planned to meet on Sunday with Israeli Prime Minister Ehud Olmert, seeking to push forward with newly re-launched peace talks despite the setbacks.

Pressed by the United States and Israel to take control of the situation, Egyptian forces in riot gear lined the border and began placing barbed wire and chain-link fences to prevent more Gazans from entering Egyptian soil.

The Egyptian government faces a difficult balancing act. It does not want to be seen as aiding Israel in its blockade of Gaza, but it fears the spread of Islamist influences and the effects of becoming home to so many undocumented Palestinians.

Citing the breach in Gaza's southern border, some top Israeli officials have advocated cutting Israel's remaining links with the coastal territory and putting the onus on Egypt.

Tensions flared at the border on Friday as some in the crowd threw stones at Egyptian police, who responded with batons and water cannons.

I have two brothers still inside Egypt. They should not close the border until everyone returns, said one of the Palestinian stone throwers, 20-year-old Mohammed al-Masri.

Egyptian security forces told the crowd over loudspeakers that the border would close at 3 p.m. (1300 GMT), but a security source said orders have yet to be given to fully seal the area.

PALESTINIANS FIND A WAY

There is, up to now, difficulty in fully controlling the entry of Palestinians because of the number of openings through which they are entering, the Egyptian security source said.

As police blocked some sections of the border, Palestinians found other parts of the wall they could still jump over.

Hamas government spokesman Taher al-Nono said efforts by Egypt to re-close the border were not part of an agreement with the Islamist group, which seized control of Gaza in June.

We insist and urge our Egyptian brothers that there must be a mechanism to allow the passage of people and goods through the Rafah crossing in a legal and organized manner, al-Nono said, referring to the once European-monitored border terminal that has largely been closed since Hamas's takeover.

Since militants blew up the wall at Rafah, the border has been transformed into a giant open-air market, selling everything from goats to full size refrigerators.

One Palestinian bought a camel in the Egyptian coastal town of el-Arish for his wedding day and rode it all the way home to Gaza City, a distance of more than 80 km (50 miles).

I bought a motorcycle, cigarettes, biscuits, corn chips, cheese and a small generator. I think they can close the border now, said 38-year-old Saeed al-Helo after crossing back into Gaza. I think Gaza has enough food supplies for a month.

Al-Nono said that was not the case. The crisis in Gaza still exists, both in terms of fuel and electricity. What the merchants brought from Egypt was not enough to compensate for the shortages incurred over the last seven months, he said.

Israel, which occupied Gaza in 1967, pulled troops and settlers out in 2005, but it still controls the strip's northern and eastern borders, airspace and coastal waters. Deputy Defence Minister Matan Vilnai said Israel wanted to hand responsibility for electricity, water and medicine supplies over to others.

Violence has also flared in the occupied West Bank. On Thursday, Jewish settlers shot dead two Palestinians in the settlement of Kfar Etzion, an army spokeswoman said. In a second incident, Palestinian gunmen killed an Israeli border policeman.

Egypt Israel