The Israeli prime minister, Binyamin Netanyahu, will hold talks in Washington on Tuesday with President Barack Obama as tension escalates in the Middle East after a weekend of violence and with little sign of an imminent return to direct peace talks with the Palestinians.

Netanyahu sounded a defiant tone today, refusing to back down on settlement construction in East Jerusalem, but he faced a new round of criticism after four Palestinian teenagers were shot dead on the occupied West Bank in the space of 24 hours, in what Palestinian officials condemned as an Israeli military escalation.

Ban Ki-moon, the UN secretary general, travelled to Gaza, where he denounced the Israeli economic blockade and the "unacceptable suffering" it causes.

Netanyahu was to fly to Washington tonight to speak at the annual meeting of the powerful pro-Israel lobby Aipac before his meeting with the president. His trip comes at a time of rare crisis in relations between Israel and the US, triggered by Israeli approval earlier this month for the construction of hundreds of settler homes in Jerusalem.

The international community does not recognise Israel's occupation and annexation of East Jerusalem, and settlements on occupied land are regarded as illegal under international law. The approval for the construction meant indirect talks with the Palestinians collapsed before they had even begun.

At first Washington was strongly critical of Israel, but the administration soon tempered its language and has instead reportedly pressed for concessions from the Israelis in private.

However, Netanyahu refuses to concede on the main issue: he told his cabinet today he would not give up building in East Jerusalem. "From our point of view, construction in Jerusalem is like construction in Tel Aviv," he said. "These are the things which we have made very clear to the American administration." He did concede that all key issues could be discussed in any indirect "proximity" talks involving Israel and the Palestinians, but there have been no talks between the two sides since Israel's war in Gaza, more than a year ago.

George Mitchell, the US special envoy, was in Jerusalem again today hoping to start at least indirect talks. Speaking before meeting Ehud Barak, the Israeli defence minister, Mitchell said US relations with Israel were "unshakeable".

The diplomacy was overshadowed by growing concerns about violence on the ground. Two Palestinian teenagers, Muhammad and Salah Qawariq, were shot dead today by Israeli troops near Nablus. The military said the two had tried to stab a soldier; Palestinian officials said the pair had been farming and were detained by the troops for some minutes before they were shot.

The incident happened as Palestinians in another village near Nablus buried two boys, Mohammad Qadus, 15, and Osaid Qadus, 17, who were shot dead by Israeli troops on Saturday. It marked the most serious violence in the occupied West Bank for more than a year. A Thai worker was also killed in southern Israel last week by a rocket fired by Gazan militants.

Salam Fayyad, the Palestinian prime minister, said there had been a "military escalation" by Israeli which "has serious risks and puts in jeopardy the Palestinian authority's achievements of security and stability".

Mustafa Barghouti, an independent Palestinian politician, said the latest killings were a "provocation", and that Palestinians should not return to negotiations without a halt to all settlement building. "Without a total and complete freeze of settlements immediately, both in the West Bank and East Jerusalem, any negotiations will be a cover for Israeli measures," he said.

The UN secretary general, Ban, crossed into Gaza and again called for an end to the three-year economic blockade of the strip and its 1.5 million Palestinian residents. Israel has finally allowed in window frames and construction materials to allow the UN to complete 151 apartments, but there are still tens of thousands of homes awaiting repair after last year's war. The supplies were "a drop in a bucket of water", Ban said. The blockade "undercuts moderates and encourages extremists", he said.

Demonstration deaths

X-ray reveals teenager shot with live ammunition

It was mid-afternoon on Saturday when Mohammad Qadus, 15, and Osaid Qadus, 17, returned by bus to their village, Iraq Burin, near Nablus. They arrived during a demonstration that took their lives. Israelis from the nearby Brakha settlement, built in part on the village's land, had come down on to Iraq Burin's farmland, as they do most Saturdays, according to Palestinian witnesses. The villagers began protesting and Israeli troops were deployed, entering the village. Palestinian boys threw stones at the soldiers; the soldiers fired teargas and rubber-coated bullets.

The two Qadus boys, friends but not close relatives, were at the end of the village furthest from the settlement and did not join in the stone throwing, witnesses said. But an Israeli army vehicle approached, and a soldier fired two rounds in quick succession at the boys. Mohammad was hit in the chest and died within minutes. Osaid was hit in the head, slipped into a coma and died hours later in hospital.

Amir Aref, 16, a friend of both boys, tried to drag them to safety. He described how he saw Osaid sitting on the ground in front of a store. "I was telling him: 'Stand up, stand up.' But he refused to answer," Aref said. "I looked at him. Blood was coming down from a small hole in his forehead, his brains were coming out."

He then turned to Mohammad and saw him lying on the road nearby. He had been hit in the chest: photos of his corpse later showed a small entry wound near his heart and a larger exit wound in his back.

"I carried him and took him into the village in my arms," Aref said. "I looked at him and he said 'Amir', then blood came out of his mouth. He gasped and then he died."

Witnesses and doctors at the Nablus Speciality hospital, where the boys were taken, said both had been hit by what appeared to be live rounds.

The Israeli military said in a statement there had been a "violent and illegal riot" in the village and that soldiers "responded with riot dispersal means". It said troops fired teargas and rubber bullets but denied firing live rounds. "Live fire was not used," it said.

However, a hospital x-ray of Osaid Qadus, seen by the Guardian, showed a bullet lodged in his brain. Ahmed Hamad, a doctor at the Nablus hospital, said the x-ray showed a "classic, pure metallic bullet". He said both boys had injuries with small entry wounds indicating live rounds.

As the families buried their children today, the Brakha settlers were out on the hilltop with bulldozers clearing more farmland. The settlement, home to about 1,300 religious settlers, was built in 1983 and is deep inside the occupied West Bank.

Abdul Nasser Qadus, 51, father of Osaid, said it was "beyond doubt" that both children had been shot with live bullets. Standing next to him, Amar Qadus, 37, brother of Mohammad, said: "Do you believe a 15-year-old boy is threatening Israel's security?"