RAMALLAH,  Mar. 27 (JMCC) - Israeli troops withdrew from the Gaza Strip Saturday after the fiercest round of fighting since Israel's assault on the territory fourteen months ago.

Two Israeli soldiers and one armed Palestinian were killed in the exchange between troops and Hamas gunmen. Seven Palestinians were also wounded according to medical staff.

Fighting began on Friday, when varying reports claim Israeli troops crossed into the strip to prevent explosives from being planted near the barrier separating Gaza and Israel. The soldiers engaged in a gun-battle with armed fighters, eventually bringing in tanks and bulldozers.

The exchange follows a recent build-up in tension involving targeted Israeli air-strikes and Palestinian rocket fire. Gaza has remained under Israeli siege for over 1000 days, its residents unable to rebuild homes and infrastructure after a devastating 22-day assault conducted by Israel nearly a year and half ago, which left the majority of Gaza in ruins.

Israel has been accused of possible war crimes and crimes against humanity for its military conduct during the offensive in which approximately 1,400 Palestinians were killed and thirteen Israelis. Hamas has also been accused of possible war crimes for 'indiscriminate' rocket fire directed at Southern Israel.

The latest violence occurred during the backdrop of failed attempts at restarting indirect negotiations between Israel and the Palestinian Authority. The Arab League summit which convened on Saturday was said to be considering alternate plans to negotiations with Israel.

UN Secretary-General Ban Ki-Moon decried the recent violence in Gaza while attending the Arab League summit.

I am very concerned at the escalation of violence and loss of life yesterday in the vicinity of the Gaza border, Ban told a news conference.

I reiterate my appeals made during my recent visit for maximum restraint and an end to all violence, in particular at this critical time when we are engaged in efforts to revive peace talks.

Arab League Secretary-General Amr Moussa told summit delegates that they should prepare for the possiblity that the peace process with Israel is a total failure. He also insisted that the time had come for the Arab world to consider changing direction.

It's time to face Israel. We have to have alternative plans because the situation has reached a turning-point, he said.