GAZA CITY ø After three days of heavy fighting, Israel's military began winding down its largest operation in the Gaza Strip since the 1967 Arab-Israeli war.

Israeli troops and armored combat vehicles streamed out of the southern Gaza town of Rafah on Friday. The withdrawal included that from two neighborhoods in Rafah where the bulk of the fighting had taken place.

As Israeli troops and tanks left Rafah neighborhoods, Hamas gunners fired a Kassam-class short-range missile toward Israel. Nobody was hurt. In all, 42 Palestinians were killed in Operation Rainbow, Palestinian sources said. Israel did not report any casualties.

Israeli military sources said the departure marked a new phase of the operation, which began on Tuesday and aimed to destroy Palestinian insurgency strongholds and weapons tunnels along the Egyptian-Gaza border. The sources said seven key insurgents believed responsible for the tunnels have been captured.

"What has taken place is that those with information or connected to the tunnels have been captured," Israeli minister Gideon Ezra told Israel Radio on Friday. "At the end of their interrogation, they [military] will locate the tunnels. They have decided to proceed according to intelligence."

The Israeli departure from Rafah came amid U.S. pressure on the government of Prime Minister Ariel Sharon to end the operation in wake of the firing of Israeli tank shells that killed eight Palestinians during a march in Rafah on Wednesday. The sources said Israeli forces would remain on the outskirts of Rafah to prepare for operations over the weekend.

Operation Rainbow was conducted in three phases. The first phase, which lasted one day, isolated Rafah from the rest of the Gaza Strip.

During the second day, Israeli troops and main battle tanks, backed by attack helicopters, unmanned air vehicles, fought their way into Rafah's Tel Sultan neighborhood, regarded as the focal point of the Palestinian insurgency in the southern Gaza Strip.

The third stage of the operation, which began on Thursday, called for troops to locate Palestinian weapons tunnels. The mission was carried out by the Givati Brigade in the Brazil neighborhood, located adjacent to the Egyptian-Gaza border corridor.

Military sources said one tunnel was found on Thursday. The sources said at least four tunnels were believed to be in the neighborhood.

By Friday, Givati left Brazil while the Golani Brigade withdrew from Tel Sultan. The soldiers left leaflets along the streets that warned Palestinians not to participate in anti-Israeli activities.

Officials said fresh troops would replace some of the withdrawn forces and that major goals of the operation have already been fulfilled. They said troops would return to Rafah on the basis of intelligence of new tunnels or the formation of insurgency cells.

The military has pressed the government to expand the Egyptian-Gaza corridor from the current 50 meters to up to 300 meters. But Attorney General Menachem Mazouz has asked the military to draft options for border security that would not require an expansion of the corridor and the destruction of Palestinian homes in adjacent Rafah.

In another development, a Jordanian soldier tried to gun down an Israeli delegation that was waiting to cross the Allenby Bridge border on Thursday.

After one shot, the soldier's gun jammed and he was overpowered. None of the Israelis, who had attended a strategic conference in Amman, were injured.]