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A top Palestinian security official who is related to Yasser Arafat escaped assassination late Thursday after a rocket-propelled grenade was fired at his office, officials said. The explosive missed and hit a prison, wounding 10 inmates.

Speculation on the attempt against Maj. Gen. Moussa Arafat focused on fellow Palestinians because residents in the Gaza area said there were no Israeli army soldiers in the vicinity. An Israeli military source called the incident an internal Palestinian matter, without elaborating.

In a statement, Palestinian security said several of the injured prisoners had serious wounds. Among the inmates are suspected collaborators with Israel and criminals. Arafat's office is in a compound that includes the central prison and security offices. Arafat, a cousin of the Palestinian leader, was not in his office at the time.

The attack came as Israeli soldiers, police and volunteers fanned out to try to find a missing soldier. Police expressed concern that he might have been kidnapped and killed by Palestinian militants, despite a cease-fire.

Oleg Shaichat, 20, was in uniform and armed when last seen Monday by a fellow hitchhiker traveling in a car near the biblical village of Cana on his way home to a nearby Jewish satellite of Nazareth, Israel's largest Arab town.

The soldier's disappearance followed the July 11 abduction of an Israeli taxi driver by militants. He was freed in a raid by Israeli commandos in the West Bank, and officials said afterward the captors apparently operated independently of Palestinian militant groups.

The main militant groups called a temporary truce June 29, but Israel and the Palestinian Authority are struggling to make progress on the stalled "road map" peace plan, a US-backed blueprint for ending violence and establishing a Palestinian state by 2005.

Palestinian Prime Minister Mahmoud Abbas was to meet with President Bush in Washington on Friday and Israeli Prime Minister Ariel Sharon was scheduled to meet Bush on Tuesday.

Security officials repeatedly have said they have intelligence warnings of militant intentions to kidnap Israeli soldiers. Since the cabbie's abduction, the Israeli military reinstated an order forbidding soldiers from hitching rides with strangers.

Shaichat was last seen about 15 miles from the West Bank. There have been no ransom demands or claims of responsibility. Police say Shaichat was last seen in a car with military license plates.

"In a worst-case scenario, we assume that he got out and entered another car and maybe that vehicle was hostile," regional police chief David Ziso told Israeli army radio.

"Hostile" is security shorthand in Hebrew for Palestinian militants.

"It's possible he was kidnapped, or worse," Ziso said.

There has been sporadic violence since June 29. On Thursday, an Arab Israeli driver was shot and killed by Israeli police after refusing to stop at a roadblock near the West Bank, police said.

The man, a Bedouin, was bringing four Palestinians from the West Bank - three miles from the shooting - into Israel illegally, police spokesman Gil Kleiman said. Members of the dead man's family went to the scene in southern Israeli's Negev desert and threw stones at police.

On Tuesday, Israeli police on the lookout for a Palestinian attack shot dead an Israeli Arab driver who ignored an order to pull over in northern Israel.

One of the issues holding up progress on the peace plan is disagreement over the security barrier Israel is building near the border with the West Bank. On Thursday, a US official and a report on an Israeli Web site said Israel might consider changing the route of the fence, which could be up to 372 miles long.

Palestinians have demanded Israel stop building the barrier, which would cut deep into the West Bank to encompass Israeli settlements. Israel argues the fence is needed to stop suicide bombers from attacking Israelis.

The US official said on condition of anonymity that the Israelis could re-examine the plan for the fence to veer into the West Bank.

A senior Israeli official, however, refused to discuss any possibility the plan would be altered.

Another important disagreement is over how to handle the estimated 7,700 Palestinians being held in Israeli jails. Israel has agreed to free about 400, but the Palestinians demand thousands be freed.

About 500 people marched in Gaza on Thursday calling for the releases, hoisting photos of imprisoned relatives and shouting slogans such as, "No peace without setting free all detainees!"

"The prisoners issue is the most important term of the truce and would be the main reason behind the annulment of the truce," Nafez Azzam, a senior Islamic Jihad official in Gaza, told the marchers.

Israel has refused to release anyone directly involved in attacks on Israelis. A committee of Israeli government ministers on Wednesday deferred a decision on releasing members of Hamas and Islamic Jihad until another discussion in the full Cabinet.

Israel also has argued it would be dangerous to release many prisoners before the Palestinians begin dismantling militant groups responsible for attacks that have killed hundreds of Israelis over the past three years. Palestinians say they fear a harsh crackdown on militants would trigger civil war.

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