Soldier Dies in Rescue Effort, Clouding Israelis’ Joy at Nobel : Mideast: The kidnaped 19-year-old is killed by his Islamic militant captors as Israeli army unit storms a West Bank house. Second soldier, 3 Palestinians also die in the raid.

The Israeli soldier whose kidnaping by Islamic militants threatened to derail the Israeli-Palestinian peace process was killed Friday night in a firefight when Israeli soldiers stormed the West Bank house where he was held.

The disastrous climax to a hostage drama that has absorbed Israelis since Tuesday night overshadowed the nation’s joy at the announcement Friday morning in Norway that Israeli Prime Minister Yitzhak Rabin and Foreign Minister Shimon Peres received this year’s Nobel Peace Prize, along with Palestine Liberation Organization Chairman Yasser Arafat.

In a hastily called late-night news conference Friday, a grim-faced Rabin told the nation that the soldier, 19-year-old Nachshon Waxman, was killed “in cold blood” by his captors during the operation.

“I, as minister of defense and prime minister, take full responsibility,” Rabin said. “It is our obligation not to surrender to terrorism but to act against it.”

Arafat aide Marwan Kanafani said the PLO chairman was saddened by the loss of life. Kanafani said the PLO had been vindicated in its assertion that Waxman was not being held in Gaza.

Another Israeli, an officer identified at the scene as Capt. Nir Poraz, was killed during the attack. Nine other Israelis were wounded and three Palestinians were killed, Chief of Staff Lt. Gen. Ehud Barak said. Two Palestinians were arrested.

Barak said that Waxman, whose hands and feet were tied, was shot in the neck and chest by his captors shortly after the assault on the house in the village of Bir Nabala began. Bir Nabala lies just outside Jerusalem’s northern municipal boundary, only two miles from the home of Waxman’s parents.

The elite unit mounted the attack only 90 minutes before the 9 p.m. (11 a.m. PDT) deadline set by the militant group Hamas for killing Waxman if Israel refused to release Palestinian prisoners in its custody. The commandos were slowed by having to use explosives to force their way into the house, Barak said.

Once inside, they had to use explosives again to destroy the door to the room where Waxman was held, Barak said.

“They could hear the terrorists in the room with Waxman shouting, ‘The soldier is already dead,’ ” Barak said. “They shouted at the terrorists to surrender, but they said they preferred to die.”

It was a stunning turn of events at the end of a day during which most Israelis anxiously awaited the Hamas deadline.

Throughout the week, Israelis have listened to the tearful pleas of Waxman’s mother, Esther, broadcast on Israel Army Radio and Israel Television, for the release of her son, who holds dual American-Israeli citizenship. The soldier’s plight triggered a massive outpouring of support for the family.

Tens of thousands of Israelis responded to a request from the family Thursday night and flocked to the Western Wall in Jerusalem’s Old City--a site holy to Jews as the only remnant of the Temple of Solomon, the destruction of which marked the start of the Diaspora--to pray for Waxman’s safe return.

Hundreds gathered outside the family home in a northern Jerusalem suburb Friday night as the deadline approached and then passed.

So caught up in the drama was most of the nation that Rabin violated religious prohibitions against working on the Sabbath in order to hold the press conference, broadcast live on Israel Television, and explain how Waxman died.

The somber turn of events was particularly confusing, because just three hours before the army acknowledged that Waxman died in the failed rescue attempt, a Hamas leader announced that the organization had negotiated with Israel a 24-hour extension of its deadline for killing Waxman.

Mahmoud Zahar told Israel Television at 8 p.m. that “the deadline has been extended.”

Zahar said that the militants holding Waxman, for whom he said he was acting as a mediator, had agreed to extend their deadline after Israel agreed to free Sheik Ahmed Yassin, Hamas’ founder and spiritual leader, and 32 Palestinian women it is holding among about 4,000 Palestinian prisoners.

Rabin confirmed that he had received the support of both his Cabinet and opposition parties for negotiating with Hamas. He used an Israeli Arab member of the Knesset, Israel’s Parliament, as a go-between.

“There was hope, but Rabin killed the hope and the soldier,” said the go-between, Talab Sanaa, after Waxman’s death was announced. “There were chances to bring out the soldier alive.”

The Izzidin al-Qassam military unit of Hamas, which claimed responsibility for abducting Waxman on Sunday, had said on Tuesday night that it would kill him Friday night unless Israel released Yassin and 200 other prisoners.

Zahar said an appeal broadcast by Israel Television on Thursday night from the jailed Yassin--the second he had made--to Waxman’s captors, asking that they not harm the soldier, persuaded the kidnapers to modify their demands and extend the deadline.

But Rabin said Friday night that Hamas waited too long to make it clear to him that it was willing to extend the deadline.

“The policy of this government is conducted along two lines,” Rabin said. “One is the efforts to achieve peace, and the other is an unrelenting war against terrorism.”

Rabin said that Israeli security forces learned only Friday morning that Waxman was being held in Bir Nabala, a village of about 7,000 people. Until Friday, Israel had insisted that he was being held in the Gaza Strip, in territory controlled by the PLO.

After the Izzidin al-Qassam unit first issued its demands in a videotape aired on Israel Television on Tuesday night, a furious Rabin on Wednesday ordered Gaza closed, banning about 30,000 workers from their daily commute into Israel.

He also suspended peace negotiations with the Palestinians that were under way in Cairo, and he told Arafat that Israel’s future relations with the Palestinian Authority were at stake.

In response, Arafat ordered the biggest roundup of suspects since Israel handed him control over the daily lives of Palestinians in Gaza and the West Bank town of Jericho last May.

Hamas activists warned that Arafat was risking civil war by arresting as many as 200 supporters of the movement, which was founded in Gaza and enjoys widespread support there.

Secretary of State Warren Christopher backed Rabin’s tough stance with the Palestinian Authority, lecturing Arafat in Alexandria, Egypt, on Friday morning that he must “do everything conceivable” to find Waxman.

Palestinian officials kept saying they had no proof Waxman was in Gaza, but Barak and other Israeli officials scornfully dismissed such demurrals throughout the week.

Rabin offered no apologies to Arafat on Friday night, nor did he say when talks with the Palestinians will resume or when Gaza will be reopened. Israel is the primary source of employment for residents of Gaza, an impoverished and overcrowded strip of coastal land with little industry of its own.

“The people who carried out the kidnaping were given orders from Gaza,” Rabin said at the press conference. “Their commander and the person giving them orders is in Gaza. Therefore I say: Recognizing the fact that it is true that Waxman was not held in Gaza, still these actions are being planned and directed from Gaza.”

It is up to the Palestinian Authority, Rabin said, to “prevent turning the Gaza Strip into a base from which terrorist attacks are planned and initiated.”

In Washington, President Clinton issued a statement calling Friday’s events a “dark moment.”

“In the face of such cowardly and evil action, I know that it is hard to go forward,” the President said. “But we owe it to all those who have paid such a heavy price to persist and finally prevail in our pursuit of peace.”

Peace Deferred

In a news conference after the raid, Israeli Prime Minster Yitzhak Rabin said, “I wish I could give up the Nobel Prize to get the two soldiers back.”

West Bank Raid

Cpl. Nachshon Waxman was killed in the village of Bir Nabala in the West Bank. The kidnaping has threatened to wreck the fragile Israel-PLO peace accord and trigger new violence in the region.