Saadat and several other prisoners walked out of the besieged prison in the West Bank town of Jericho, handing themselves over to the Israeli forces, said the witnesses.

Israeli forces stormed the Jericho jail in a bid to arrest Saadat who was imprisoned for almost four years for alleged role in the murder of Israeli tourism minister Rehavam Zeevi in 2001.

Two Palestinian prison guards were killed and five others injured during the military confrontation, Palestinian security sources said.

Saadat vowed earlier in the day that he would never surrender to Israeli forces.

He told Xinhua reporter in an earlier telephone interview before his surrender that he was intending to resist the attempts of Israeli forces to arrest him by all means.

"They (Israelis) can either take us alive or take us dead, but we would never surrender or give ourselves up easily to the occupation forces," He asserted.

However, he eventually gave in after the Israeli soldiers destroyed wall of the prison compound with bulldozers.

The operation came minutes after British monitors were withdrawn from the prison, prompting furious charges of collusion from the Palestinians.

In reaction to the Israeli raid on the Jericho prison which hasbeen under the British and U.S. supervision, Palestinian militants abducted 12 foreigners with different nationalities in the Gaza Strip and the West Bank, while attacking the Western facilities in Gaza City, according to Palestinian security officials and witnesses.

One militant was killed and five others injured when masked militants broke into the French cultural center in Gaza City and exchanged fire with police, Palestinian security sources said.

Separately, dozens of Palestinian militants attacked the offices of the British Council and the European Union (EU) in Gaza City.

"I saw masked young men are throwing stones at the British Council building, many of them climbed the walls and jumped inside,and burned furniture," said a witness named Saed al-Madhoun. Some militants wearing red hats, the symbol of the PFLP,smashed the windows of the EU building, witnesses said.

Meanwhile, the Islamic Resistance Movement (Hamas) announced the suspension of talks with other parliamentary parties over the formation of a coalition government following the Israeli raid.

"The meetings supposed to be held today at the Gaza City homeof Hamas leader Mahmoud Al-Zahar were suspended," Hamas spokesman Salah al-Bardaweil told reporters in front of Al-Zahar's house. "We decided to suspend today's meetings in response to the crime which is being committed in Jericho prison."

Hamas prime minister-designate Ismail Haneya slammed the "dangerous escalation" and warned Israel against any attempt on the life of Saadat and his comrades.

He held Israel responsible for any consequence while the PFLP vowed to retaliate for Israel's capture of Saadat.

Meanwhile, the Palestinian observers warned of a third Palestinian Intifada or armed uprising following Israeli operation." Either detaining or killing Ahmed Saadat would lead to a thirdIntifada against Israel in the Palestinian territories," said Ashraf el-Ajrami, a Palestinian analyst.

Israeli Minister of Public Security Gideon Ezra said on Tuesday that Israeli Acting Prime Minister Ehud Olmert and Defense Minister Shaul Mofaz ordered the raid on the Jericho prison after Palestinian President Mahmoud Abbas said last week that he was prepared to free Saadat.