JERUSALEM (AFP) - Israeli Prime Minister Ariel Sharon warned that troops should not flinch from firing on residential areas if necessary to protect themselves during next year's planned pullout from Gaza, as a Palestinian militant was killed in new air raid on the territory.

The army had to have authorization to fire back "no matter where" as it prepared for the likely scenario of a withdrawal under fire, Sharon told a weekly ministers' meeting.

"The terrorists are aware of our sensitivity regarding firing at residential centres and therefore use them as shields to launch attacks. There needs to be a response to that," officials quoted the premier as saying.

"The right way is first to warn those who provide shelter to the terrorists and, if that does not help, to attack the sources of the fire no matter where.

"We must not let them get used to us not responding to fire."

As the premier set out his new get-tough approach in the face of criticism from right-wing former allies, an Israeli helicopter strike killed an Islamic militant and wounded six other people in the heart of Gaza City, sources from both sides said.

The Israeli army said Khaled Abu Samaiah, 33, manufactured improvised rockets and other munitions for the military wing of Hamas.

Abu Samaiah's car took a direct hit from a rocket fired by the Israeli aircraft on Al-Jalah Street in the heart of the city, witnesses said.

Among the wounded, were a nine-year-old child, a 75-year-old man and a doctor who happened to be passing by, medics said.

A member of the smaller militant group Islamic Jihad was shot dead by Israeli forces in eastern Gaza earlier as he tried to plant a bomb.

Three other militants were wounded in the shooting near the Karni border crossing into Israel, Palestinian medical and security sources added.

Sharon's Gaza pullout plan, which he will present in its entirety to next week's cabinet, forms part of a dual strategy to separate Israel from the Palestinians.

His government has also been building a controversial barrier across the West Bank despite widespread international criticism.

His Foreign Minister Silvan Shalom said Sunday however he hoped to close the international debate over the project, predicting that Palestinian efforts to take the issue to the UN Security Council would fail.

Shalom, in New York for this week's annual meeting of the UN General Assembly, has been lobbying European heavyweights furiously to ensure the Palestinians do not get the required nine votes needed to have the barrier debated by the 15-member Security Council.

The minister told public radio he believed the EU heavyweights did not want the issue played out at the council.

"I have met numerous foreign officials, particularly from France, Germany, Italy etc to tell them that they must not give the Palestinians a platform for this subject," Shalom said.

"Our efforts are beginning to bear fruit as the majority of countries are telling the Palestinians that they don't want it discussed any more."

The Palestinian Authority, which has observer status at the UN, has been lobbying the Arab bloc to push for a Security Council resolution against the barrier.

While they are aware the United States would veto any resolution against the project, especially if it calls for sanctions, Palestinians believe a Security Council debate would add to the pressure on Israel.

Palestinian leader Yasser Arafat's senior advisor, Nabil Abu Rudeina, said diplomatic efforts would continue.

"We will work with the Arab group and the group of the non-aligned countries to ask the General Assembly to implement the decision that has already been voted for," he told AFP.

Around 300 Palestinians took part in a protest Sunday against construction of the barrier in the south of the West Bank.

Israeli troops fired teargas and soundbombs in a bid to disperse around 300 protestors who had been trying to stop the heavy earth-moving equipment from working, southwest of the city of Hebron.

One protester was taken to hospital after being struck by officers who were wielding batons, Palestinian medics said. Israeli sources said four troops were also slightly injured.