Israeli forces have arrested a Hamas leader and killed his brother during a raid on a Gaza border town early Thursday.

The Israeli army says the wanted man, Younis Abu Daqqa, was arrested after a brief gunbattle with militants near the town of Khan Yunis in the southern Gaza Strip.

Palestinian witnesses say at least two other Palestinians were wounded in the firefight.

In a separate incident, two Palestinians were wounded when an Israeli tank fired at them near a border fence in southern Gaza.

The Israeli army says the men were spotted crawling toward the fence.

In another development, a previously unknown Palestinian terror group said Wednesday that it is holding two Western journalists kidnapped earlier this month in the Gaza Strip.

The group calling itself the Holy Jihad Brigades released a videotape of the hostages American Steve Centanni and Olaf Wiig, of New Zealand and demanded that the U.S. free all Muslim prisoners within 72 hours. In the video, the journalists, who work for Fox News, appealed to friends and families to work for their release. Centanni said they are being well-treated

State Department spokesman Gonzalo Gallegos said the U.S. does not make concessions to terrorists and that the hostages should be freed immediately without conditions.