Secretary of State Colin Powell blamed terrorists for the burgeoning war in the Middle East, but said U.S. Special Envoy Anthony Zinni would remain in the region to work on a peace settlement.
"The United States condemns these acts of terror and those responsible for them," Powell said Friday. "Once again, terrorists have set back the vision of the Palestinian people for a state that would live in peace, side by side with Israel."
Israel attacked Palestinian Authority headquarters in Ramallah, where chairman Yasser Arafat is holed up. The retaliation follows some of the heaviest attacks in days, including a "Passover Massacre" Wednesday that killed 22 and a suicide bombing Friday morning by a 18-year-old girl that killed two outside a Jerusalem shopping center.
Powell placed blame solely on the shoulders of the Palestinian militants, whose attacks have cast a pall on any chance for a peace settlement despite Arab support for a Saudi-backed peace plan and two weeks of Zinni-led negotiations that seemed to be yielding success.
"There was reason for guarded optimism and let's be clear about what brought it all to a halt: terrorism. Terrorism on the part of those who would target innocent civilians."
Resisting the charge that Israel is now trying to reclaim Palestinian lands that it had earlier agreed to cede to a Palestinian state, Powell said Israeli Prime Minister Ariel Sharon assured him that they have no intention to occupy the areas, including Ramallah where tanks are rolling down the streets.
"They are going in to find terrorists and pick up weapons," he said. "We ask the Israelis to show the necessary restraint... Israel is trying to defend itself."
He said that the goal remains to achieve an enduring and comprehensive peace for Arabs and Israelis.
"Those things look dark now, we must have hope," he said.
Powell said that he has spoken with President Bush and his national security team, led by Condoleezza Rice. The president is wathcing the situation from his Crawford, Texas ranch, but held a morning conference call with Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, Chief of Staff Andy Card, and CIA Director George J. Tenet, whose plan was been used by Zinni as a blueprint for a truce.
"We have followed developments overnight and this morning in the Middle East," said National Security Council spokesman Sean McCormack. "General Zinni remains in the region, is in contact with the parties and continues his work."
Powell said Zinni had received a "commitment in principle" from Sharon to continue to work toward the Tenet plan and an eventual cease fire even as it rained bullets down on Arafat's headquarters. Arafat has also pledged to continue talks.
Israel's Cabinet approved an extended military operation and agreed to call up thousands of reserve troops on Friday. Prime Minister Ariel Sharon said Israel had sought a cease-fire in good faith, "but all Israel got in return was terrorism, terrorism and more terrorism."
Bush has declined to speak publicly on the spiraling violence.
Israel declared Arafat an enemy Friday and sent troops and tanks to break into his West Bank compound, battling his security forces and shelling the buildings. Arafat took refuge in a windowless, ground-floor room, although Israeli officials insisted they were not trying to hurt him.
Friday's assault in Ramallah marked the first time Arafat's office building has been targeted, although Israel has shelled other buildings in the compound in the past 18 months of fighting. Defense Minister Binyamin Ben-Eliezer said there was no intention to harm Arafat, but the fire on his building made the situation volatile.
Powell said Friday that he had assurances that Sharon was not attempting to kill Arafat, a promise that he made to the United States for which he expressed regret earlier in the week.
In Lebanon, Palestinian refugees burned tires to protest the Israeli attack and Arab politicians denounced it.
It is unclear how much more U.S. officials can do after the Bush administration's public peacemaking efforts of recent weeks were challenged by the Passover attack.
Nevertheless, many both inside and outside the administration insist the United States is still the only party that both sides trust and thus the only who can bring them back from the brink of violence.
The Associated Press contributed to this report.