Two Israeli soldiers have been killed in the West Bank town of Qalqilya during an operation by the Israeli army to retake control of Palestinian towns, the Israeli military has said.

The military offensive comes in response to two suicide attacks in Jerusalem in the past two days which have left 26 Israelis dead.

After Wednesday's attack, in which eight people including the bomber died at a bus stop in the French Hill neighbourhood, Palestinian leader Yasser Arafat issued a personal appeal for a halt to the suicide attacks.

He expressed "full and comprehensive condemnation of all kinds of operations that target Israeli civilians".

"I have to be honest with you - these operations must be totally stopped," he said, warning that the alternative might be "full Israeli occupation of our lands."

Correspondents say the Palestinian leader's personal appeal for a halt to the suicide bombings marks a new development.

Israeli forces meanwhile continued to occupy parts of the West Bank towns of Jenin and Qalqilya, where troops moved in after Tuesday's bus bombing, which killed 19 people.

In one incident in Qalqilya, Israel said two soldiers had been killed and four injured when they came under grenade and gunfire while searching for a Palestinian militant.

It said one suspected militant had been killed in the exchange.

It's hard to get people to focus on peace today, when they're still suffering from the consequences of terrorism as we speak

Ari Fleischer, Whitehouse spokesman

Elsewhere, troops entered a suburb of Ramallah, where Mr Arafat has his headquarters, as well as advancing into Bethlehem.

Israeli helicopters and warplanes also pounded buildings in the Gaza Strip, reportedly wounding 13 Palestinians.

The Israeli Government has announced its intention to reoccupy more Palestinian-ruled areas in response to the continuing suicide attacks.

Frequent target

"I was standing at the bus stop and suddenly heard a loud explosion," said Avital Shalem, who was among the wounded in the French Hill attack.

"I fell to the ground and when I opened my eyes I saw a terrible sight," he told Reuters news agency.

The junction, which serves a number of bus lines and is a hitchhiking point, had been targeted by Palestinian militants before.

The Palestinian group al-Aqsa Martyrs Brigade claimed responsibility for Wednesday's bomb, saying it was in retaliation for the killing of two militants by the Israeli army.

US proposals on ice

The White House has condemned the latest suicide attack and says its immediate aftermath is not the right time for President George Bush to lay out a new Middle East peace plan.

There have been Israeli incursions into several Palestinian towns

Mr Bush's much-anticipated initiative is expected to include the recognition of a provisional Palestinian state in the months ahead, with its permanent status, and borders, to be determined within three years.

A White House spokesman said: "It's hard to get people to focus on peace today, when they're still suffering from the consequences of terrorism as we speak."

The US has given its backing to Israel's military response to the attacks.

"The president believes that Israel is in the middle of recovering from a very serious attack and that Israel has a right to defend itself," White House spokesman Ari Fleischer said.