Israel is insisting it will continue to re-occupy Palestinian-ruled areas in the West Bank despite strong criticism from the United States.

Prime Minister Ariel Sharon says Israel will maintain its military grip on six towns in the West Bank until the Palestinians extradite those responsible for assassinating cabinet minister Rehavam Zeevi last week.

Israel's incursion drew unusually strong criticism from the U.S. State Department, which called for the immediate withdrawal of all forces from Palestinian-controlled areas.

A State Department spokesman said the United States deeply regrets and deplores the Israeli military actions "that have killed numerous Palestinian civilians."

In a statement Mr. Sharon's office says Israel has "no intention" of permanently re-occupying Palestinian-ruled areas.

The statement says the assassination of Mr. Zeevi "crossed a red line" and Israel is "realizing its rights to self-defense and to protect the lives of its citizens."

The militant Popular Front for the Liberation of Palestine claimed responsibility for killing the cabinet minister, saying it was in retaliation for the killing of its leader earlier this year by the Israeli military.

The Palestinians have detained members of the group, but are rejecting Mr. Sharon's demand that they be handed over to Israel.

While attention was directed at the Israeli military raids, a Hamas leader was killed in a bomb blast in the West Bank town of Nablus. Palestinians blamed the death of Ayman Halaweh on Israel.

Although the Israeli government did not claim responsibility for the explosion, the prime minister's office said Mr. Halaweh was at the top of a list of militants Israel has asked the Palestinian Authority to arrest.

A statement said Mr. Halaweh was a master bomb-maker who constructed devices used by suicide bombers to kill dozens of Israelis.

The United States and other countries have regularly criticized Israel's policy of targeted killings.

Palestinians call the attacks assassinations and say at least 60 people have been killed in such operations during more than a year of fighting.

While the United States and some of Mr. Sharon's coalition partners are urging a more moderate approach toward the Palestinians, the prime minister's hard-line constituency is demanding even tougher action.

About 80,000 demonstrators filled the streets of Jerusalem Monday night calling for Mr. Sharon to demolish the Palestinian Authority and expel President Yasser Arafat from the territories.