Shot in cold blood, the mother and her children reading a bedtime story in an oasis of peace

Photographs of the Ohayoun children were stuck to the outside wall of the house in which they were murdered yesterday – four-year-old Noam and five-year-old Matan, grinning up at the camera.

In the early hours, the two boys were shot dead in their beds by a suspected Palestinian gunman as their mother, Revital, read them a bedtime story. Revital, who died as well, called her ex-husband in a panic, and Avi Ohayoun heard the gunshots that killed his children and their mother on his mobile phone.

Inside, the floor of the room where they died was strewn with toys, the room where Revital and her two children waited in terror as they heard the gunman kick in the door.

Many children have died in the conflict here, murdered in their beds before their mothers' eyes. But there was a special reason to mourn yesterday. Kibbutz Metzer is not a Jewish settlement in the occupied territories. The people here are among the most moderate and peace-minded of Israelis. This is the kibbutz where the farmers offered to give up their own land to stop the Israeli army cutting down Palestinian olive trees.

But that did not save Noam and Matan. At a quarter to midnight – "I can tell you the exact time, I will never forget it," one of the residents told us – people heard shooting in the kibbutz. A gunman had got into this oasis of peace. Outside the communal dining hall, he opened fire on a couple walking by. He killed Tirza Damari, a woman aged 42 who was visiting the kibbutz. Yitzhak Dori, the secretary or the head of the kibbutz, drove up in his car. The gunman shot him dead.

At that time, Revital Oyahoun was reading to her sons. She heard the gunfire from inside the house, just a few minutes' walk from the dining hall, and called the boys' father, Avi.

Their lights would have been the first the gunman saw. The house is small, half of a white bungalow. In typical kibbutz fashion, it is defenceless. Anyone could walk into the garden through the front gate. You could see where the gunman had kicked in the wooden front door as Revital asked her husband what she should do.

Avi was still listening on the phone as the gunman walked into the bedroom. He heard the gunshots, then silence. The murderer was able to escape before anyone could stop him. Avi did not know what had happened, because there was silence down the line. When he was told they were all dead, he collapsed in grief.

The garden is full of toy cars and plastic slides. The Ohayouns had just moved here. The photographs of Revital's children she had stuck up outside the front door are now hopelessly inadequate memories of stolen lives. In one, the boys are fooling around with a guitar. Yesterday, the guitar lay untouched in a corner.

For the gunman to enter the kibbutz was not difficult. It had a policy of open doors to all visitors and, even though he arrived in the middle of the night, the security was not tight. Although the Green Line that separates Israel from the West Bank is less than a mile away, there are no soldiers or police guards. The gunman appeared to have got in under a wire fence.

But why did the gunman come here? Kibbutz Metzer was at the forefront of the peace movement. The people here insist Israel must make a peace deal that creates a Palestinian state, next to Israel. There were scenes you almost never see here yesterday as, one by one, Palestinians dressed in traditional white keffiyehs came to pay their respects and grieve with the kibbutzniks. These were Palestinians with Israeli citizenship, who live in Israel. In a very rare example of co-existence, the kibbutz has always enjoyed good relations with them. But recently its residents had also reached out to Palestinians inside the West Bank.

Yesterday, the kibbutz was a sombre place, candles and flowers laid all around. But only a month ago, the place was full of life and energy as the residents welcomed journalists to explain why they were offering to give up their own land for the sake of the Palestinians.

The Israeli army is building a fence surrounding the West Bank supposedly to prevent attacks of this sort. The people of Kibbutz Metzer objected because the planned route of the fence will not run along the Green Line, the 1967 border before Israel occupied the West Bank, but will cut off hundreds of Palestinian farmers from their land. They were offering to give up their land so the fence could run along the Green Line.

Responsibility for the killings was claimed not by the hardline Hamas or Islamic Jihad, but by the Al-Aqsa Martyrs' Brigades, who are loosely linked to Yasser Arafat's Fatah movement and had been thought to be observing a ceasefire on attacks inside Israel, as opposed to the occupied territories.

But comments from an Al-Aqsa Martyrs' Brigades leader, quoted on an Israeli website, suggested Fatah might have lost all influence over a section of the group. "We are not committed to any agreement signed by Fatah or Hamas as long as the Israel continues its crimes against our people," he was quoted as saying.

Dov Avital, who was acting as spokesman for the kibbutz, said: "I believe we were attacked because of what we are doing." A month ago, he was standing next to the Arab mayor of Kefin as the kibbutz spokesman on the fence issue. "This was deliberate; it was carefully planned so the gunman could get in here and get out again alive. He knew exactly where to come. I believe somebody wanted to show that co-existence between Palestinians and Israelis is not possible. We didn't expect anyone to attack this small symbol of peace."

But Mr Avital insisted that the attack had changed none of the kibbutzniks' views. The offer to give up their land was still on. "We did it because we believed it was right," he said. And, with the Prime Minister expected to visit the kibbutz last night, Mr Avital said: "I will tell [Ariel] Sharon that we still believe in a two-state solution."

There were claims from Palestinian sources that the gunman had broken into Kibbutz Metzer thinking, mistakenly, that it was a settlement. But it was unlikely that a Palestinian militant would not know which side of the Green Line he was on.

The killings came as a Fatah delegation was meeting Hamas leaders in Cairo, and was believed to be trying to persuade the group to stop attacks inside Israel. There will be little faith that any ceasefire can be agreed now. Mr Arafat has ordered an inquiry into the attack. Hani al-Hassan, his new Interior Minister, has pledged to stamp out attacks inside Israel. If the Martyrs' Brigades claim of responsibility is genuine, it could embarrass both sides. But more pressing to Mr Arafat will be the Israeli response.

With a new Israeli cabinet composed of hardliners, Mr Arafat may face being expelled from the West Bank. Binyamin Netanyahu, the Foreign Minister, has been calling for this for a long time. But Mr Sharon's promise to George Bush not to harm Mr Arafat may save him. Last night, Israeli security sources said they were planning a new military operation in the West Bank.

Yesterday evening, in the Gaza Strip, a Palestinian boy aged two was shot dead by Israeli troops. The Israeli army said its troops had returned fire but knew of no casualties.

Waning influence of the pioneers who created modern Israel

The kibbutz was once the symbol of the pioneering spirit that created modern Israel, a commune of people who pooled all their wealth and resources and tried to create a new way of life in a new country.

But today the kibbutzim are on the wane. The young leave as soon as they are old enough and few young people from outside want to join. Only 2 per cent of Israelis live in kibbutzim, and their average age has been pushing up into the late fifties.

Perhaps that is not surprising. After all, the values of the original kibbutzniks – socialist, often disparaging the trappings of traditional Jewish life and often atheist – are hard to identify with Israel today, a country where the religious right has increasing political influence, and secular society has become enthusiastically materialist.

The original kibbutzim were true communes whose members pooled everything. There was no personal wealth, everybody worked on the communal farm or in communal industry and the profits were used to feed, clothe and house the kibbutzniks. Everybody ate together in a communal dining room.

Even families were not private. Children slept together in communal dormitories and were educated together. Time with their real parents was strictly controlled.

But the dream faltered many years ago. The economics simply didn't work. The kibbutzim still provide 40 per cent of Israel's agricultural output, and 8 per cent of its industrial output, but many have been forced to give away land to service debts.

The kibbutzniks say they are making revolutionary changes to keep the kibbutzim alive – and to make them more attractive to young people. Communal parenting has gone out the window. The communal dining rooms may still be there, but the kibbutzniks pay for the food they eat. In the old kibbutzim, there were no personal earnings, but today residents get paid a monthly stipend.

Kibbutz Metzer, with its banana and avocado groves and its plastic factory, is typical of the kibbutzim in flux. Many residents now work outside the kibbutz and return only at night.