Israeli soldiers and Palestinians exchanged gunfire in and around Palestinian leader Yasser Arafat's office complex, but Israel denies its troops stormed his building. Clashes have been reported in other parts of the West Bank, including the town of Hebron, as an explosion in the northern Israeli port city of Haifa has killed at least 14 people and wounded about 30 others.

Israel's military has imposed a 48-hour curfew on the West Bank town of Ramallah, as it continues a house-to-house search for terrorist suspects.

Reached by telephone, Mustafa Barghouti, who heads the Medical Relief Committee in Ramallah, described the situation.

"Nobody can leave any place, because anybody who dares get out of the house will be shot at," said Mr. Barghouti. "The whole city now is under 48-hours curfew, day and night. And they say it will last weeks."

He says the troops have raided the Chamber of Commerce and dozens of other buildings in their hunt for terrorist suspects. "This is a process of destruction of everything that relates to an independent Palestinian entity. There are also tanks everywhere and the whole city is terrorized," said mr. Barghouti.

Israeli tanks rolled into Ramallah early Friday morning, and laid siege to Yasser Arafat's headquarters there. The troops took control of most of the compound, confining Mr. Arafat and dozens of security guards and staff to his three-story office building.

Israel's military denies Palestinian claims the troops have stormed Mr. Arafat's office, but confirm a heavy exchange of gunfire in the compound.

Foreign Ministry spokesman Aryeh Mekel says the military operation will continue until terrorist networks are destroyed.

"We are continuing our operation against the bases of terror, which are concentrated in various parts," said Mr. Mekel. "And Ramallah has become a base of terror, because, from there, the various orders were going out to various suicide bombers and others."

Even while the military campaign was under way on Friday, a Palestinian teenage woman killed herself and two others in a suicide bombing at a Jerusalem supermarket.

Mr. Mekel says Israel has been restrained in its response to a series of attacks, including the suicide bombing in Netanya that killed 22 Israelis celebrating the start of Passover holiday last Wednesday and another attack in Tel Aviv.

"Public opinion is outraged and there is no way the government can continue with the current situation. First of all, every government has responsibility, first of all to provide security to the citizens, and when there is no other way, as a last resort, sometimes a country has to use military force," he said.

A few hours after Mr. Mekel's comments, another suicide bomber blew up a restaurant in the northern Israeli port of Haifa.

Arab leaders have telephoned Prime Minister Ariel Sharon to urge an end to the military campaign. Jordan has threatened unspecified measures, if the operations do not stop immediately.