The Israeli army is conducting house-to-house searches for a second day in the West Bank town of Nablus, in the latest stage of its operation to pursue Palestinian militants.

Eyewitnesses saw several people being arrested, in addition to the 50 detained on Friday.

There's been a train of Palestinian terrorism that's been hitting Israel over the past week to 10 days, and what we've been able to discern is that its hub is in Nablus

Dore Gold Israeli Government spokesman

They said the old quarter of Nablus remained surrounded by tanks, and snipers were still on the rooftops.

The army stormed into Nablus on Friday, declaring it a closed military zone and rounding up Palestinian men. Two Palestinians were killed as soldiers, backed by more than 100 tanks, poured into the city.

The army also said it had destroyed three bomb-making factories, two on Friday and one on Saturday.

Israeli Government spokesman Dore Gold told the Associated Press news agency that Nablus had replaced Jenin as the "main factory of suicide bombings".

"There's been a train of Palestinian terrorism that's been hitting Israel over the past week to 10 days, and what we've been able to discern is that its hub is in Nablus," he said.

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Israeli soldiers armed with small hammers and metal bars have been making their way through the narrow alleys of the Casbah, or Old City.

	Population: 150,000 (32,000 refugees) Israel says: "Nablus is focus of activity of terror group" Israeli incursions: 3 April (19 days), May (several short incursions), 21 June (40 days approx), 1 August

They are reported to be smashing through connecting walls to avoid exposing themselves to Palestinian fighters in the streets.

The incursion came in response to Wednesday's bomb attack on a Jerusalem university, which killed seven people including five US nationals.

Hamas, who claimed the Jerusalem attack, said it was in retaliation for the deaths in Gaza of Salah Shehada, a leading member of the militant group, and 14 others including nine children.

Palestinian leader Yasser Arafat called the Israeli operation in Nablus "a new massacre".

"I need an answer from the whole United Nations: Is this acceptable?" he said at his headquarters in the West Bank city of Ramallah.