(Adds attribution for death toll in 13th paragraph)
* Israeli troops raid West Bank home to snatch Hamas man
* He and two other Palestinian militants killed in shootout
* Tensions cast shadow over U.S.-brokered peace talks
By Ali Sawafta
JENIN, West Bank, March 22 (Reuters) - Israeli forces shot three Palestinian militants dead on Saturday in a raid on a home in the occupied West Bank to capture a wanted Hamas Islamist militant, Israeli military and Palestinian officials said.
The Palestinian Authority denounced the violence that it said threatened U.S.-brokered peace talks ahead of a looming April deadline set by Secretary of State John Kerry.
Nabil Abu Rdainah, spokesman for Palestinian President Mahmoud Abbas, urged Washington to take steps "to prevent a collapse" of negotiations.
Palestinian militants fired guns into the air at the men's' funeral in the West Bank town of Jenin, scene of the clashes. Flags from their armed groups draped their coffins and thousands of mourners shouted calls for revenge and chanted against Abbas's involvement in talks with Israel.
"Where are you Abbas? They killed us while you watched," was one of the chants heard.
The Israeli military said its forces raided a home in a refugee camp in Jenin where they shot and killed a Hamas militant, Hamza Abu Alhija, after he opened fire. Two Israeli troops were wounded when he shot at them, they said.
Israeli forces killed two other Palestinians as they confronted protesters throwing petrol bombs and rocks at them during the raid to capture Alhija, 24, wanted as a suspect for plotting shootings against Israelis, the military said.
Lieutenant-Colonel Peter Lerner, a military spokesman, called Alhija "a ticking bomb" involved in previous attacks who was also plotting additional shootings under the direction of Hamas Islamists in control of the Gaza Strip.
Lerner scaled back an initial death toll from four as the military had reported earlier.
Hamas rejects Israel's existence and opposes Abbas's negotiations with the Jewish state.
Palestinian officials confirmed three militants had been killed, Alhija from Hamas and one each from Islamic Jihad and Al Aqsa Martyrs Brigade, which is linked to Abbas' Fatah movement.
CHARGES OF 'COLD BLOOD' KILLINGS
News of the killings ignited new concern for the fate of Israeli-Palestinian talks for Palestinian statehood in territory captured in a 1967 war, already beset by a crisis over Israel's balking at freeing prisoners Abbas wants released by the month's end under an earlier Israeli commitment.
The Palestinian Negotiation Affairs Department says that including Saturday's incident, Israeli forces have killed at least 60 Palestinians and injured almost 900 since the resumption of negotiations last July.
Palestinian government spokesman Ehab Bseisso charged those killed in Jenin had been "murdered in cold blood" by Israel.
In Jenin's ramshackle refugee camp, the owner of the now bullet-riddled home where Alhija had tried to hide said the troops had arrived at around 2 a.m.
"There was shooting in the house for about half an hour, and then the soldiers came and ordered us to leave so we did," said Azmi Husniya, 67.
Husniya said he had seen Alhija jump from a window while trying to flee. The house was badly damaged in the raid and two of his sons were wounded in the shooting.
Israeli spokesman Lerner said Alhija shot at troops who came to arrest him and on their attack dog. He shot and wounded two Israeli soldiers as he tried to flee the house they surrounded.
"Our forces responded and he was killed," Lerner said.
The fighting was some of the worst seen in Jenin since a 2002 Israeli incursion in the area, highlighting rising tensions between the sides, three days after troops killed a Palestinian youth elsewhere in the West Bank. (Additional reporting by Nidal al-Mughrabi in Gaza; Writing by Allyn Fisher-Ilan; Editing by Tom Heneghan)