In an illustration of the frustrations of the Middle East, diplomats here reported that before the latest deaths in Gaza, negotiators had made some progress in their talks over transferring security in most of the Gaza Strip from Israel to the Palestinian Authority. There was no telling tonight whether that progress would be set back.

The four Palestinians from the Aksa Martyrs Brigades were first said to have been killed today by Israeli tank fire, though other reports said they might have died when a bomb they were planting exploded prematurely. 

The day's events lent a surreal cast to the scene here at the World Economic Forum in a resort on the Dead Sea, where more than 1,200 envoys, officials, business leaders and other conferees hailed recent progress in the Israeli-Palestinian situation even as the bitterness of that dispute coursed through countless conversations.

Coming to the end of one of his longest trips as secretary of state, Mr. Powell started in the morning by expressing mild but unmistakable criticism of Israel's killing of a top Hamas leader on Saturday night.

"I regret we had an incident that could be an impediment to progress," Mr. Powell said, referring to the killing of Abdullah Qawasmeh, a leading Hamas figure. "I would much rather on a Sunday morning wake up to find that we are moving forward, and it was not necessary to have this kind of activity on either side."

The secretary's terse reference to Israel's latest strike against suspected Palestinian terrorists marked the second time in two weeks that the United States felt compelled to criticize Israel, if only obliquely. The week before last, President Bush rebuked Israel for an attempt to kill a Hamas leader, saying it had undercut peace talks.

But the rebuke for Israel was mixed today with exhortations directed at the Palestinians by Mr. Powell and others to take action to stop attacks on Israeli soldiers and citizens so as to fortify Middle East peace efforts that have looked more promising recently than at any time in the past two and a half years.

Two diplomatic tracks were under way in Israel that were the focus of much of the discussion here on the Dead Sea. One was Israel's negotiation with the Palestinians on Gaza. The other was the Palestinian Authority's negotiations to achieve a cease-fire with Hamas.

A cease-fire with Hamas is supported by the Palestinians' leadership and by its main Arab backers, Saudi Arabia, Egypt and Jordan. All of them say they would prefer such an arrangement to a civil war between the militant groups and the shaky security forces under Mahmoud Abbas, the Palestinian prime minister.

American and Israeli officials say they are less impressed with the cease-fire talks, explaining that if there is a cease-fire, it almost certainly will have to be followed by aggressive actions by Palestinian security forces against Hamas, including arrests, forced disarmament and potential clashes.

For now, the negotiations on the Gaza Strip and the Hamas cease-fire talks, while not officially connected, appear to be intertwined, making progress on both even more difficult. Arab, European and American diplomats all say, for example, that Mr. Abbas may be waiting for a cease-fire before reaching an accord to take over the Gaza area.

On the other hand, Israel's prime minister, Ariel Sharon, may be holding up approval of a deal on the Gaza Strip until he sees how Mr. Abbas is going to handle Hamas. Some here speculate that Mr. Sharon may also be waiting to close the Gaza deal when Condoleezza Rice, President Bush's national security adviser, visits Israel late next week.

Arab diplomats attending the economic forum here assailed Israel for the killing of Mr. Qawasmeh and for its policy of pinpoint killings of militant leaders. Mr. Abbas's son said here that he thought Israel was deliberately trying to sabotage the cease-fire negotiations.

Mr. Powell, who left Washington a week ago for Cambodia and then traveled to Bangladesh before arriving here on Thursday night, made an emotional appeal for restraint by both Palestinians and Israelis at a news conference and in a speech this afternoon.

No less significant, Mr. Powell joined with Secretary General Kofi Annan of the United Nations and the foreign ministers of the European Union and Russia to sound the same theme. The four officials, sometimes referred to as the quartet, devised the staged peace plan for a Palestinian state known as the road map.

In a statement read by Mr. Annan, the four officials said they "deplore and condemn the brutal terror attacks against Israeli citizens" carried out by Palestinian militants, citing not only Hamas but Palestinian Islamic Jihad and Al Aksa Martyrs Brigades. "All Palestinian individuals and groups must end acts of terror against all Israelis, anywhere," the group said.

But there was also tough talk directed at Israel, including "deep concern over Israeli military actions that result in the killing of innocent Palestinians and other civilians."

Mr. Annan, going beyond the statement, called on Israel "not to use disproportionate force in civilian areas," to stop demolitions of Palestinian homes and to stop engaging in "extra-judicial killings." 

The talk in the corridors here was about the Hamas and Gaza negotiations next door in Israel, however. A diplomat close to the negotiators said they seemed "pretty close" to resolving the Gaza dispute, which has centered on Israel's demand that it be allowed to maintain a security presence along the main road that runs the length of the Gaza Strip.

Israel maintains that it must keep some forces on the road both to protect Israeli settlers in several pockets of Gaza and to make sure that Hamas and other groups do not regroup and arm themselves to carry out attacks in Israel itself.

A source of surprise to many Arab and European diplomats here is the increasing evidence of the United States' willingness to make demands on Israel to take parallel actions — not only by giving up the Gaza Strip, but also by dismantling "outposts" of settlements and releasing prisoners.

The American demands on Israel are thought to be based on the belief that without such actions, Mr. Abbas will not have the political support to act against Hamas, diplomats say. "The Americans are not really letting the Israelis off the hook on this," said a diplomat. "We all realize that time is running out."