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Israeli troops sealed off the West Bank city of Hebron today while searching for a suspected Palestinian assailant who stabbed a Jewish settler to death and torched his home.

The army said it was barring Palestinians from entering and leaving the volatile city after the late-night killing of Rabbi Shlomo Raanan, 63-year-old grandson of a spiritual leader of Israel's settler movement.

Prime Minister Benjamin Netanyahu cut short a holiday in northern Israel, announcing he would return to Jerusalem in the afternoon for consultations in the face of tensions in Hebron and in Lebanon, where Hezbollah guerrillas killed two Israelis.

President Yasser Arafat promised Netanyahu's adviser, Yitzhak Molho, that he would order Palestinian police to take all steps to help catch the killer. Arafat's adviser Marwan Kanafani told Reuters: "The Palestinian Authority is determined to carry out its responsibilities in this regard."

"We warned earlier of the increase of tension and friction. It was a pity to have loss of lives from the two sides," Kanafani said. He accused Israel of using human beings "to apply political theories" -- a reference to Jewish settlements opposed by Palestinians.

Early today, about 20 Palestinians took to Hebron's streets, hurling rocks and bottles at Israeli soldiers. Palestinian police helped break up the disturbance.

Israeli army Maj. Gen. Moshe Yaalon clamped a curfew on the 20 percent of Hebron under Israeli control, confining the 20,000 Palestinians there to their homes.

The umbrella council of Jewish settlers in the West Bank and Gaza said the assailant knifed the rabbi to death and wounded his wife in their home in an isolated Jewish compound in the heart of the city.

Council spokesman Aharon Domb said he believed the attacker had fled to a part of Hebron under Palestinian Authority control.

Rabbi Raanan was the third Jewish settler killed by suspected Palestinians in the West Bank in August. Two were shot dead earlier this month outside Yitzhar settlement near the Palestinian-ruled town of Nablus.

Palestinian witnesses said several enraged Jewish settlers took to the streets, hurling stones at Palestinians.

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