As the recriminations flew both ways, Palestinian premier-designate Ahmed Qorei was preparing to meet with the Palestinian leadership to present the final list of ministers for his new cabinet.

Friday night's violence occurred when a gunman infiltrated a home in the Jewish settlement of Negohot near Hebron and opened fire. He killed a 30-year-old guest and a baby girl, and lightly injured her parents, medical sources and the army said.

He was shot dead by troops a short time later, the army said.

The attack occurred shortly after the beginning of Jewish New Year, or Rosh Hashanah, when many families would have been sitting down for a special meal.

The latest deaths brought to 3,497 the number of people killed during the three-year-old Palestinian uprising, including 2,612 Palestinians and 822 Israelis.

Just hours earlier, a meeting of diplomats from the Middle East quartet of the United States, United Nations, European Union and Russia roundly condemned both Palestinian attacks and Jewish settlement activity.

A statement issued after the meeting in New York blasted the "vicious (Palestinian) terror attacks" in the past two months and demanded that Israeli settlement activity stop.

It also expressed concerns over Israel's construction of a security barrier in and around the West Bank a bid to stop the attacks.

There was no immediate Israeli response, but a senior aide to Palestinian leader Yasser Arafat accused Israel of time-wasting and called on the quartet to deploy international observers to ensure the roadmap's implementation.

"The Israeli government is continuing to waste time escaping a commitment to the roadmap. We want the quartet committee ... to send international observers to start implementing it on the ground," Nabil Abu Rudeina told AFP.

Qorei was due to meet Saturday with the central committee of Palestinian leader Yasser Arafat's Fatah movement in the West Bank town of Ramallah to present the final list of 24 names for his new government for their approval.

Later in the afternoon, he was to present the same list to the executive committee of the Palestine Liberation Organisation (PLO) for its approval, before taking it before the Palestinian Legislative Council next week, a senior Palestinian official told AFP.

Ahead of the two-day New Year celebrations, the army sealed off the West Bank, saying no Palestinians would be allowed in until the end of the holiday, except for humanitarian reasons.

Following Friday's bloodshed, Israel was on high alert for further violence government spokesman Avi Pazner told AFP, saying attacks on Jewish holidays had become a tactic for Palestinian militants.

"It has become almost a tradition for Palestinian groups to attack us during a Jewish holiday when they believe we are not on guard against them as usual," he said.

The army said the attack was the fifteenth instance in just under two years in which militants had infiltrated or attempted to infiltrate Jewish settlements during a sabbath or holiday.

Those attacks left 43 Israelis dead and another 54 injured.