At least eight Israelis were killed Wednesday morning when a Palestinian suicide bomber blew himself up on a Haifa-Jerusalem commuter bus, sending body parts flying through the air during rush hour. 

On the West Bank, "Operation Defensive Shield" continued unabated as troops penetrated deeper into two refugee settlements. From Lebanon, Hezbollah guerrillas fired rockets at northern Israel and the Golan Heights. 

U.S. Secretary of State Colin Powell is due to arrive in the region Thursday, and Israeli Prime Minister Ariel Sharon deemed the top American diplomat's intention to meet with Palestinian leader Yasser Arafat a "tragic mistake." 

The bus bombing was the second major attack on Israeli civilians since the massive military operation was launched on March 29 in response to yet another suicide attack that left 26 dead. 

Doubts continued to grow in Israel about the effectiveness of military force, especially after 15 soldiers were killed in fighting Tuesday. 

The Islamic militant group Hamas claimed responsibility for the Haifa bombing, which went off at about 7:15 a.m. local time. The bomber detonated explosives strapped to his body shortly after boarding the crowded bus. 

Witnesses said the blast lifted the bus a few feet into the air. Much of the roof was peeled back, windows and tires were blown out, and the front of the bus was a twisted wreck. 

Rescue workers arriving at the scene within a few minutes covered several bodies lying on the highway with sheets and blankets. Personal belongings were strewn across the asphalt, including an olive-colored jacket normally worn by soldiers, a skullcap and an identity card. 

Police said at least eight people were killed, while Israeli TV and radio reports put the number of dead at 10. It was not immediately clear whether that included the bomber. Fourteen people were wounded. 

"It's a catastrophe. Shrapnel and bits are everywhere," one witness, identified only as Motti, told Israel Radio. "You have no idea what it is to see such a thing ... people are thrown in all directions." 

Sharon adviser Raanan Gissin said the bombing was a sign that Israel could not be expected to keep withdrawing from Palestinian cities — as the United States has demanded — until it has hunted down Palestinian militants. 

"If we don't complete the job and dismantle the terrorist infrastructure and defeat terrorism, the chances to reach a cease-fire and move to a political process are dim," he said. 

In the West Bank refugee camp of Jenin, the scene of the deadliest fighting during the offensive, dozens of gunmen holed up in a small area fired sporadically Wednesday morning at Israeli troops advancing with bulldozers. 

A Hamas leader in the area, Jamal Abdel Salam, said he received a phone call at mid-morning from a member of Hamas' military wing who informed him he and his comrades had run out of ammunition. 

"This is the last call," Abdel Salam quoted the gunman as saying. "We are in a group inside a house. They [the Israelis] are at the door and they are coming to arrest us. Take care of my family." 

However, Israeli military sources said fighting in the camp was continuing. 

On Tuesday, 14 Israeli soldiers were killed in the camp — 13 in an ambush and one in fighting later in the day. It was one of the worst losses sustained by the Israeli military in combat since the 1973 Mideast war. 

The soldiers had stumbled into a trap prepared by Palestinian gunmen. A group of soldiers entered the courtyard when dozens of linked charges went off, possibly detonated by a suicide bomber. The force and other soldiers rushing to their rescue then came under fire from gunmen on nearby rooftops. 

The Israeli daily Maariv said the entire incident was photographed by a pilotless plane flying over the camp. 

"We saw flashes of the explosion and the people lying on the ground," Maariv quoted one officer who saw the photos as saying. 

Several commentators criticized the military for sending reserve soldiers, who have had little recent training in urban warfare, into such a complex situation. 

Others said the military at one point considered using fighter planes to overpower the remaining gunmen in the camp more quickly, but that the idea was dismissed because such an attack would likely cause large numbers of casualties. 

More than 100 Palestinians are believed to have been killed in the Jenin camp, with many bodies still lying in the street. Among those reported dead was Mahmoud Tawalbeh, a leader of the militant Islamic Jihad group. Tawalbeh, 23, has masterminded a number of suicide bombings in Israel. 

In the West Bank city of Nablus, rescue workers on Wednesday retrieved the bodies of 14 Palestinians killed in the fighting, bringing the total of dead in the city since the start of the Israeli invasion to 60. The old city of Nablus, a warren of narrow alleys, had been a flashpoint, with battles raging there for several days. 

On the outskirts of Nablus, Israeli tanks and helicopters shelled the Al Ain refugee camp before dawn Wednesday, damaging some homes. After daybreak, soldiers called over loudspeakers on teen-age boys and men to come out of their homes, and witnesses saw hundreds of Palestinian men sitting on the ground in front of the camp's mosque. 

The Israeli military said that since the start of the offensive, 28 Israeli soldiers have been killed, but has not provided a list of Palestinian casualties. The Palestinian Red Crescent said Tuesday that at least 128 Palestinians have been killed and 337 wounded, but that the toll was expected to rise significantly. 

The army said it has detained more than 2,100 Palestinians, including 117 on Israel's wanted list, and confiscated nearly 2,500 rifles. 

Israel, meanwhile, said it would not stand in Powell's way if he tries to arrange a meeting with Arafat, who has been confined to a few rooms at his former West Bank headquarters in the West Bank town of Ramallah. 

However, in a speech to an American Jewish delegation, Sharon said such a meeting would be "a tragic mistake," according to his adviser, Gissin. 

Bestowing legitimacy on Arafat "has always encouraged him to increase terrorism," Gissin said. "He [Arafat] writes checks for suicide bombers with Iraqi money." 

Sharon has branded Arafat the leader of a "regime of terror," and has suggested he would no longer do business with him. However, Powell reiterated Tuesday that the United States would continue dealing with Arafat. 

President Bush has urged Israel to wrap up its offensive. Israel withdrew from two Palestinian towns Monday, but forces remain in four others, and Sharon reiterated Tuesday that the campaign would continue. 

"This is a battle for survival of the Jewish people, for survival of the state of Israel," Sharon said on Israel TV. 

In the West Bank town of Bethlehem, a standoff at one of Christianity's holiest of sites — the Church of the Nativity — continued Wednesday, straining delicate relations between Israel and the Vatican. 

More than 200 armed Palestinians have been holed up in the shrine, built over the traditional birthplace of Jesus. Sharon has said that Israel would not lift the siege until the armed men surrendered. 

An Armenian monk was shot and seriously wounded Wednesday at the compound. The Israeli army and Palestinians each blamed the other for the shooting. 

The monk, identified as Armin Sinanian, 22, was undergoing surgery at Jerusalem's Hadassah Hospital, where spokeswoman Yael Bossem-Levy said he was in serious condition. 

A Palestinian policeman said by telephone that Israeli troops shot an elderly monk after breaking open a door. The policeman refused to give his name. It was not immediately clear whether the door led into the compound or into the Church of the Nativity itself. 

Capt. Jacob Dallal, an Israeli army spokesman, said shots were fired at troops as they made a delivery of food intended for the 60 priests and nuns inside the church compound. He said Palestinians opened fire, hitting the monk. Israeli soldiers, he added, did not return fire. 

Also Wednesday, Lebanese guerrillas fired more than a dozen rockets at the Israeli-annexed Golan Heights and northern Israel in the most extensive attack since Israel withdrew from Lebanon nearly two years ago. 

Israeli leaders have held Syria, the main power in Lebanon, responsible for cross-border attacks. However, Israel has not retaliated harshly until now, apparently for fear of opening a second front. 

The Associated Press contributed to this report.