Facing pressure from the United States, Europe and his own people, Palestinian leader Yasser Arafat agreed Thursday to hold presidential and parliamentary elections within six months.

Arafat's decision came as Palestinian legislators mounted their most high-profile challenge yet to the Palestinian leader, calling for elections within a year and a new Cabinet within 45 days.

Early Friday, violence erupted in the West Bank. More than 20 Israeli tanks and other armored vehicles entered the Palestinian city of Jenin before dawn and soon after, gunfire and explosions were heard, Palestinian residents of the city said.

There was no immediate word on casualties and the Israeli military declined immediate comment.

Previous attempts to reform Arafat's administration have led to few significant changes, with Arafat ignoring laws passed by parliament as well as decisions by the judiciary. The proposed election would be the first time Arafat faced the voters since he was overwhelmingly elected president of the Palestinian Authority in 1996.

"President Arafat has set a program for reform and changes," said Ahmed Abdel Rahman, secretary general of the Palestinian Cabinet.

"The core of the changes will be conducting general elections in a period that will not exceed four to six months," he said, adding that Arafat has called for a meeting of the Central Elections Committee within two days.

Israeli officials were skeptical of the proposals.

"What's clear is that any Palestinian leadership would have to, first and foremost, renounce terror as a strategic option," said David Baker, an aide to Israeli Prime Minister Ariel Sharon. "Until now, terror and the Palestinian Authority have been joined at the hip."

Arafat's decision came amid questions about his popularity among his people. With the Palestinian economy in shambles and society reeling from a crushing Israeli incursion into Palestinian areas, Palestinians were pressing for reforms to an administration widely regarded as corrupt.

In a speech Wednesday to Palestinian legislators, Arafat echoed the calls for reform, but gave no details.

Palestinian legislators quickly put together a reform plan Wednesday that called for elections and a smaller Cabinet and approved it Thursday. Soon afterward, Abdel Rahman announced Arafat's own plans to hold elections.

Legislators from Arafat's Fatah movement had also demanded the creation of the post of prime minister and called for empowering it with the day-to-day operations of the Palestinian Authority. Arafat's proposal made no mention of a prime minister.

The legislators also called for streamlining the Palestinian Authority's eight security services. Arafat's proposal did not address this issue.

Arafat has run the Palestinian territories virtually unchallenged since Israel permitted his return from exile eight years ago. He was elected president in 1996 with 87 percent of the vote against Samiha Khalil, a female social worker in her 70s. Members of his Fatah faction won 50 of the 88 seats.

But pressure on Arafat is growing.

The United States has called on the Palestinians to adopt a constitutional democracy and open their closed, topdown system to counter corruption.

In addition, future U.S. humanitarian aid to the Palestinians will bypass the Palestinian Authority, including $50 million in aid approved last week by the House Appropriations Committee.

EU foreign and security policy chief Javier Solana also called for sweeping changes Wednesday. The EU has given the Palestinian Authority $337 million in aid over the past two years.

"We need a Palestinian Authority that is more able and more determined to serve its population and the security of all," Solana said. "Our expectations are clear: more transparency, more accountability, greater efficiency."

Palestinian legislator Hanan Ashrawi said elections should be held on all levels to bring new people into the government.

"All these have to be carried out if we are committed to democracy and democratic representation," she said.

Speaking before Arafat's announcement, legislator Hussam Khader, was pessimistic the Palestinian leader was serious about making meaningful changes.

"I believe Arafat may work in making cosmetic changes in the Palestinian Authority," he said. "Maybe he will change a corrupted Cabinet for another more corrupted Cabinet."

Sharon has urged the United States and other nations to reject Arafat's administration and appoint an interim Palestinian government for a year to carry out reforms, Sharon's foreign policy adviser Danny Ayalon said.

Sharon proposed the new government be established whether or not the Palestinians accept it, the Yediot Ahronot daily reported. "The free world must force this government on the Palestinians," the daily quoted him as saying.

Meanwhile, Israeli soldiers backed by tanks entered Beitunia, a Ramallah suburb, early Thursday and surrounded an apartment building. Soldiers killed Ahmed Ghanam, 25, a member of Arafat's security forces. The military said the raid helped prevent a terror attack in Jerusalem. Some two dozen Palestinians were arrested in other Israeli army raids.

Israel ended a six-week military offensive against Palestinian militias in the West Bank last week, but army raids have continued. The offensive was in response to a March 27 suicide bombing in which 29 Israelis were killed during a Passover Seder.

The Haaretz newspaper quoted Israel's deputy chief of staff as saying a postponed incursion into the Gaza Strip is likely to still take place.

Maj. Gen. Moshe Yaalon, who will take over as army chief of staff next month, said it was "only a matter of time" until the Israeli army moves into Gaza.