Palestinian leader Yasser Arafat has condemned terrorism in a statement that appears intended to satisfy U.S. demands for a denunciation of terror attacks.
The Palestinian Chairman issued the statement in Arabic expressing his "deep condemnation for all terrorist activities, whether it is state terrorism, terrorism by a group or individual terrorism."
The statement specifically denounced a suicide bombing Friday that killed six people near a crowded open-air market in Jerusalem.
The Al-Aqsa Martyrs Brigades, a group linked to the Palestinian leader's Fatah faction, claimed responsibility for the blast.
U.S. Secretary of State Colin Powell was supposed to meet Mr. Arafat Saturday in the West Bank city of Ramallah, but called off the talks.
Mr. Powell said Chairman Arafat must not miss the opportunity to "take a clear stand against violence that hurts the Palestinian cause."
Mr. Arafat's statement also criticized Israel's two-week military offensive in the West Bank, which has led to fierce fighting and the deaths of hundreds of Palestinians.
The Israelis launched the invasion late last month after a series of Palestinian suicide bombings killed dozens of Israelis.
Also Saturday Israeli tanks and troops moved into more Palestinian villages near the West Bank cities of Ramallah, Jenin and Nablus.
Witnesses said soldiers used loudspeakers to warn residents to stay inside their homes as troops searched for weapons and militants.
Israel says it has arrested more than 4,000 Palestinians in the past two weeks.
A standoff continued at Bethlehem's Church of the Nativity, built over the site where tradition says Jesus was born.
About 200 Palestinians, many of them armed, are hiding in the basilica, which is surrounded by Israeli soldiers and armor.
Dozens of monks and nuns remain inside the compound.
Christian leaders proposed Saturday that Israeli troops leave Bethlehem for three days and allow the Palestinians inside the church to put down their weapons and return home.
The proposal is not likely to be accepted by Israel, which is demanding the arrest and trial of the militants.