TEL AVIV, Israel, April 8 (UPI) -- Palestinian gunmen who found refuge in the Church of the Nativity in Bethlehem exchanged gunfire with Israeli forces Monday, as a meeting between senior church leaders and Israeli officials failed to resolve the conflict.
An Israeli Defense Forces spokesman said Israeli troops returned Palestinian fire to cover the evacuation of wounded and in the process killed a Palestinian gunman. The spokesman said the Palestinian gunmen Sunday night shot at and threw hand grenades at two military posts in Manger Square.
One border policemen sustained severe wounds and another received light injuries, while a Palestinian gunman was killed in the conflict, the Israeli military said.
"In order to evacuate the wounded policemen, the Israeli force returned fire toward sources of Palestinian fire, killing one of the terrorists," an Israeli statement said.
A smoke grenade also was used to help in the evacuation of the injured officers. Tear gas was not used against the people holed-up in the church, the statement said. The Church of the Nativity is believed to be built over Jesus Christ's birthplace.
The Israeli statement said the Palestinian shooting and the grenades "caused fire to erupt in several buildings in the compound."
Bethlehem Mayor Hanna Nasser said fire broke out in the St. Catherine Church within the complex and several bullets went through the winder of the Church of the Nativity, destroying an ancient mosaic.
Palestinian firefighters extinguished the flames. Nasser said the Palestinian killed was a police officer trying to put out the fire.
The Israelis said some 200 Palestinian gunmen are in the church along with priests and nuns. The gunmen set up a shooting position in one of the windows and clerics who have left the church said the militants had booby-trapped the doors, the army reported.
During the meeting, the Latin Patriarchate blamed Israel for the clash. An Israeli participant at Monday's meeting said army officers presented maps to prove the militants in the church caused the damage and a subsequent fire.
The Israelis asked the Catholic, Greek-Orthodox, Armenian clergymen and the Vatican's ambassador for ideas on how to ease the plight of the people in the Church of the Nativity. One of the suggestions, apparently by the Latin Patriarch Michel Sabah, was that the Israelis lift the siege, but the Israelis have insisted on getting to the militants. A Foreign Ministry official said they included "terrorists of the first degree."
A spokesman for the Latin Patriarchate, Father Raed Abu Sahliyeh, told United Press International the Israelis promised not to invade, damage or shoot at the Basilica. He said the church also asked the Israelis to provide the people inside with food and medicine, and the Israelis agreed.
On Saturday, the Israeli air force showed pictures indicating gunmen fired from a mosque's minaret in Jenin. Puffs of smoke were seen emanating from the minaret in pictures that air force commander, Maj. Gen. Dan Halutz, said were taken from an intelligence aircraft.
(Saud Abu Ramadan in Gaza contributed to this report)