JERUSALEM - A Palestinian suicide bomber blew himself up next to two agents of Israel's Shin Bet security service near an Arab town in central Israel on Wednesday, Prime Minister Ariel Sharon's office said.

An official from Palestinian President Yasser Arafat's Fatah faction said the bomber had worked for Israeli intelligence but had turned on his handlers to carry out his "national duty".

Shin Bet, also known as the General Security Services, deals with domestic security and is widely believed to be at the forefront of an undercover campaign against Palestinian militants in the 16-month-old uprising against occupation.

"During a Shin Bet operation...a suicide terrorist blew himself up near the Shin Bet force. As a result, the terrorist was killed and two Shin Bet agents were lightly wounded," Sharon's office said. The blast took place near Taibeh, close to the West Bank.

The militant Islamic Jihad group and Fatah claimed responsibility for the attack, identifying the bomber as Morad Abu al-Asal, 22.

Officials from the two groups said Asal had been a collaborator with Israeli intelligence for the past three months before switching sides.

It was the third Palestinian attack inside Israel in less than a week.

Later on Wednesday, Israeli Defence Minister Binyamin Ben-Eliezer was to hold talks in Egypt with President Hosni Mubarak, who spoke with Palestinian President Yasser Arafat by telephone about the "dangerous situation" in the region.

International efforts spearheaded by the United States to restore peace to the region have so far failed to prevent an escalation of the uprising that has included Israeli killings of militants and deadly Palestinian retribution.

Palestinian attackers have killed three people and wounded more than 120 since last Friday in bomb and shooting attacks in the western part of Jerusalem.

The latest blast was likely to amplify calls for defensive steps such as those discussed on Tuesday by Sharon and other officials on a plan to tighten security in the holy city.

The proposals envision the possible use of barriers to keep Palestinians in Arab East Jerusalem out of Jewish West Jerusalem. Palestinian officials said such a division would stoke tensions and could never guarantee Israeli security.

Israel annexed East Jerusalem in the 1967 Middle East war in a move not recognised internationally, and regards the entire city as its eternal, indivisible capital. The Palestinians want East Jerusalem as the capital of an independent state.

A Palestinian delegation is expected to leave for Washington next week to hold discussions with American officials on the latest developments, officials said.

Israeli Prime Minister Ariel Sharon is due to meet U.S. President George W. Bush at the White House on February 7.

The United States has suspended mediation and intensified calls for Arafat to rein in militants. He says this is impossible with Israeli blockades on Palestinian areas.

At least 822 Palestinians and 249 Israelis have been killed since the Palestinians began their uprising in September 2000. Nampa-Reuters