Israeli troops used Palestinian civilians, including young children, as human shields in an operation Wednesday to capture "wanted" Palestinians in the West Bank city of Jenin, witnesses said.

The Israeli army rejected the accusation, claiming its soldiers had tried to help a group of civilians who fled the house in which the "wanted" had taken refuge.

An AFP correspondent said an undercover unit of soldiers dressed as Palestinians moved into the center of the autonomous city and stopped two civilian cars less than 100 meters (yards) away from the house sheltering the resistance fighters.

The Israeli soldiers forced some of the occupants out and used the vehicle to approach the house before opening fire on the building, near the central hospital.

Ewa, a 24-year-old Polish-British woman volunteering with various local humanitarian organizations, said she approached the scene of the clashes when she heard the first shots being fired.

"I joined three girls, aged four, six and nine, and a very distressed woman who were not allowed to leave the scene of the fighting and forced to sit on the floor against a wall facing the targeted building," she told AFP, declining to divulge her surname.

"Palestinian men were then brought out of the building, handcuffed and forcibly thrown to the ground," before the assault was completed, she said.

"I was briefly allowed to leave and when I came back with water for the woman, who needed medical care, I was shoved to the ground and we had to sit against the wall," said the human rights activist.

"Some soldiers were standing beside us holding big metal shields to protect themselves, and others were behind the wall against which we were sitting, hurling grenades inside the building where the men were," she confirmed.

Her account was corroborated by the AFP correspondent on the scene and a neighbor, 42-year-old Mahmad Rehat, who said the human shields were kept for around an hour, while the Israeli soldiers fired at the building.

Three Palestinian resistance activists were finally captured, including a member of the Al-Aqsa Martyrs Brigades.

Hospital nurse Said Atatra said a boy was killed and six other Palestinians wounded during the clashes, and that all of them were hit inside the hospital compound.

"When the shooting started, many of the civilians and neighbors of the house took refuge inside the hospital walls," he explained.

But Israeli spokeswoman Major Sharon Feingold said: "As we surrounded the building, massive fire was opened at us. Shortly afterwards, as the shooting continued, about five civilians came out of the house, some of which were children, and we helped them hide behind the wall, out of the line of fire.

"At no point were they held there or forced to stay," she told AFP, saying the wall behind which they were sheltering was facing away from the firing.

The Israeli rights group B'Tselem issued a statement denouncing the use of Palestinian civilians as human shields during the Israeli raid on Jenin.

Israeli and Palestinian rights groups have documented several cases of Israeli troops using civilians, often children, as human shields during their almost daily West Bank sweeps.

They have repeatedly demanded that the army issue an unambiguous order not to use civilians during military assignments.

The Israeli supreme court last year issued a temporary ban on the use of human shields but never outlawed it completely, in spite of several petitions filed by B'Tselem.

In the meanwhile, the Gulf state of Qatar said it is prepared to raise the level of diplomatic relations with Israel if progress is registered in the Middle East peace process.

"Relations between Qatar and Israel are currently limited to a trade mission," Foreign Minister Hamad bin Jassem al-Thani told Al-Jazeera satellite television after meeting his Israeli counterpart Silvan Shalom on Wednesday in Paris.

"If progress is made in the peace process, Qatar will not be against seriously considering the possibility of raising (the level of) relations," Sheikh Hamad said from the French capital.