The three men, all aged in their 20s, were killed on Sunday on the road between the Karni border crossing and the settlement of Netzarim just south of Gaza City, a Palestinian security source who helped recover the bodies said.

Hamas later said on its website that the three - named as Ahmed Khriwat, Mohammed Limbayith and Mahmud Aliwa - had been taking part in an operation on behalf of its armed wing, the Ezzedine al-Qassam Brigades.

In a statement faxed to AFP, the group later said the three were killed while putting grenades on a road used by the military.

An Israeli military source said that troops had opened fire after the three had been spotted on the side of the road in an area which is off limits to Palestinians.

"We later found an explosive device next to the three bodies," the source told AFP.

The latest deaths bring to 3,833 the number of peopled killed since the September 2000 outbreak of the Palestinian intifada, or uprising, including 2,879 Palestinians and 886 Israelis.

The shootings came a day after two other Hamas fighters were killed by Israeli gunfire when they attacked an army position near the Karni crossing point.

Israeli army sources said troops saw two "suspect silhouettes" in a prohibited area approaching the security fence dividing the two territories and opened fire, hitting them both.

Palestinians released

Also on Sunday, a Palestinian Authority court ordered the release of four Palestinians charged with involvement in a bombing that killed three American security guards

"They were ordered released because of lack of evidence
against them," a senior official said on Sunday. But he added that a final decision on whether to free the men rested with President Yasir Arafat. 

Arafat, under US pressure to find the armed fighters who attacked an American diplomatic convoy in Gaza last October, ordered the four put on trial in February. 

"They were detained upon a decision by President Arafat and
it is now his decision when they will be freed," the official
said. 

'More could be done'

A US embassy spokesman said the United States had not been informed officially about the court's decision to release the four, members of the Popular Resistance Committees, a coalition of armed groups. 

The US convoy was attacked
last October

"We don't have any details about the decision," the spokesman said, adding that the United States believed "more could be done" to bring to justice those responsible for the bombing. 

The men had been charged with planting bombs against Israeli forces which, the indictment said, "might have led to the killing of the Americans". 

US officials have expressed concern over what they see as the slow pace of the investigation and the hastily convened
proceedings in February in a Palestinian military court. 

Following US criticism, the case was later moved to a civilian court where the four defendants had better access to lawyers. 

Protests

"They were detained upon a decision by President Arafat and
it is now his decision when they will be freed."

Senior Palestinian official

Masked PRC members have protested against the arrests and trial in rallies in the Gaza Strip over the past few weeks. They accused the Palestinian Authority of bowing to US pressure by prosecuting the men. 

No Palestinian group has claimed responsibility for the killing of the three American guards when a roadside bomb blew up as their convoy of armoured jeeps drove to Gaza City to interview candidates for Fulbright scholarships. 

A trip-wire attached to a detonator found at the scene of the attack indicated the convoy had been deliberately targeted.