JERUSALEM - Two Palestinian gunmen broke into a Jewish settlement in the southern West Bank last night, killing four Israelis and wounding eight others in the dining hall of a religious school, the first significant militant attack in a month.

The shooting began about 8 p.m. and went on for several minutes as stunned diners sat down to a Sabbath dinner at a seminary in Otniel, a small mountaintop settlement southwest of Hebron that was founded in 1983 near the Palestinian town of Yatta.

Israeli soldiers guarding the community killed one of the gunmen after a 30-minute shootout.

Authorities initially feared that the second gunman had either taken hostages or was hiding in a home, but they later said he had escaped.

About two hours after the shooting, Israeli troops scouring the countryside found and shot a man they identified as the second militant in the Palestinian town of Dahariya.

Three Israeli soldiers were wounded during an exchange of gunfire, the army said last night.

The radical Islamic Jihad militant group claimed responsibility for the shootings in an announcement on the Hezbollah television station Al-Manar in Beirut, Lebanon.

The group said the attack was in retaliation for the army's killing Thursday of one of its leaders, Hamza Abu Roub, 37, in the West Bank town of Kabatiya near Jenin.

The shooting at Otniel was the first attack with many casualties since Nov. 28 when a Palestinian opened fire at an election hall during the Likud Party primaries and killed six Israelis in the northern city of Beit Shean. A rabbi was killed last week in an ambush in Gaza, and two police officers were killed two weeks ago in Hebron.

Israeli officials called the period of relative calm an illusion and said it had nothing to do with militant groups slowing down. Instead, they credited the army's reoccupation of virtually every Palestinian city in the West Bank and the arrests of 1,800 people suspected of militant ties over the past five months.

"Obviously, we say very clearly that there can absolutely be no justification for the deliberate, cold-blooded targeting and murdering of Israeli citizens," said Jonathan Peled, a spokesman for the Ministry of Foreign Affairs, adding that 21 planned attacks were averted this month.

Yesterday, Israeli authorities said they arrested a Palestinian in a refugee camp on the outskirts of Nablus in the northern West Bank and seized an audio tape he had made to be played after his death in a suicide bombing planned for the near future.

The shootings in Otniel came one day after the Israeli army killed nine Palestinians in a series of raids throughout the West Bank. Most were gunmen or wanted militants, but several bystanders also were shot dead or wounded.

Yesterday, Palestinians vowed revenge. Thousands packed a soccer stadium in Gaza City to mark the 15th anniversary of the founding of the Islamic Resistance Movement, known as Hamas, which has sent dozens of suicide bombers into Israeli cities and onto buses, causing hundreds of deaths.

Hamas' spiritual leader, Sheik Ahmed Yassin, told the audience that "the march of martyrs will move forward. Resistance will move forward. Jihad will continue and martyrdom operations will continue until the full liberation of Palestine."

But the group is sending conflicting signals. Hamas has been meeting periodically over the past two months in Cairo with representatives of Palestinian leader Yasser Arafat's Fatah political party, which is trying to secure a cease-fire at least until Israeli elections are over in late January.

Palestinian officials fear that attacks will help Prime Minister Ariel Sharon by providing him excuses to launch harsh military reprisals and remind the Israeli public that they need a tough army general to keep them safe. Palestinians would like to see Labor's candidate, Amram Mitzna, who advocates evacuating settlements, prevail.

Reports from the meetings in Cairo indicate that Hamas has privately agreed not to attack inside Israel but would continue to target settlers and soldiers in the West Bank.

Palestinian officials warn that such vows are meaningless as long as Israel continues operations such as it did Thursday.

"There is no point to unity without legitimate struggle without defending ourselves and this is the unity we are seeking and are discussing in Cairo," Yassin told the crowd, which blew up a mock tank and burned Israeli and American flags at the rally.

Peled, from Israel's Foreign Ministry, said after last night's attack that the Palestinians "are practicing what they are preaching."

Witness accounts of the attack were difficult to obtain last night because of the Sabbath. Names of victims were being withheld until this evening, when the Sabbath ends. Otniel, which has about 1,000 residents, is not completely surrounded by a fence, as many of its inhabitants oppose dividing the land for ideological reasons.

The religious school that was targeted is inside a large building on the outskirts of the settlement bordering a road that winds through rugged hills in the area.