Israel's Supreme Court gave the army a new tool in its two-year struggle against Palestinian violence Tuesday, allowing it to expel Palestinians from the West Bank to Gaza for aiding terrorist suspects.

In the first case of its kind, the court upheld the expulsion of two relatives of a terror suspect, but overturned an order against a third person, ruling that expulsion must be limited only to relatives directly involved in terror attacks.

Palestinians called for foreign intervention to stop the Israeli practice, while human rights groups said it violates international law, particularly the Geneva Conventions.

Israel said the two, a brother and sister of a suspected terrorist, would be taken to Palestinian Authority territory on the edge of the Gaza Strip on Wednesday. Palestinian officials said they would stay in a hotel and then move to a housing project in Gaza City.

In a separate development, Israeli Prime Minister Ariel Sharon dropped his earlier opposition to allowing the Palestinian parliament to convene in the West Bank town of Ramallah but said the ban stands for legislators he deems involved in terror. The parliament is to approve the new Palestinian Cabinet and consider reform measures.

Sharon said a change is appearing among the Palestinians, who "are realizing that we cannot be defeated by force, and this can certainly be an opening to our restoring calm." Sharon was addressing Israeli police.

Also Tuesday, Israeli troops killed two Palestinians walking near a Jewish settlement in the West Bank. A military official said soldiers saw one of the men carrying a weapon and fired a tank shell at him. Palestinians said both men were unarmed.

In the Jenin refugee camp, seven Palestinians, including two children, were hurt when a bomb exploded, residents said. They said it was apparently left over from a battle with Israeli forces in April, when Palestinians planted hundreds of bombs in the camp.

At the Supreme Court hearing, the Israeli military argued that expulsions are an effective deterrent against homicide bombings and other attacks.

Human rights lawyers said the measure violates the Geneva Conventions, which forbid "individual or mass forcible transfers" or deportations of "protected persons from occupied territory to the territory of the occupying power or to that of any other country."

The court accepted the state's argument that the West Bank and Gaza Strip constitute one territory, and so sending people from the West Bank to Gaza did not amount to deportation. Israel has never acknowledged that the Geneva Conventions apply to the West Bank and Gaza Strip.

Palestinian Cabinet Minister Saeb Erekat called the expulsions war crimes and said the Palestinians may ask the U.N. Security Council to discuss the matter.

The justices approved the expulsion of Intisar and Kifah Ajouri, sister and brother of Ali Ajouri, a member of the Al Aqsa Martyrs' Brigade militia. Ajouri allegedly sent two homicide bombers to Tel Aviv on July 17, and two Israelis and three foreign workers were killed in the attack.

Ali Ajouri was killed in an Israeli army strike on Aug. 6.

The court said Intisar Ajouri sewed the explosives belts for the bombers, and Kifah kept watch while his brother moved explosives between hiding places.

The judges overturned the expulsion order against Abdel Nasser Asidi, brother of a Hamas activist accused of involvement in two West Bank attacks that killed 19 Israelis.

The conflicting rulings indicated that every time the military tries to use expulsion, it may face court hearings.

Lawyer Leah Tzemel, who represented two of the petitioners, said, "It puts Israel into difficulties with international law and leads soldiers into the possibility of being sentenced as war criminals."

She said the Hague-based International Criminal Court had jurisdiction only in cases dating from July 1, 2002, when it came into being.

The ruling, written by Chief Justice Aharon Barak, said that the military can expel a relative of a militant only if that person poses a real security threat.

The ruling said the court sought to balance security concerns and human rights. "In this balance, human rights cannot receive complete protection as if there were no terror, and state security cannot receive complete protection, as if there were no human rights," Barak wrote.

Intisar and Kifah Ajouri, the two Palestinians slated for expulsion, are residents of the Askar refugee camp, near the West Bank city of Nablus.

Their mother, Rashida, 64, said the two had not seen Ali for six months before being arrested. Two days after the Tel Aviv bombing, army bulldozers demolished the family's three-story house with six apartments for Mrs. Ajouri, her husband and their unmarried daughter, Intisar, and her five sons and their families.

"That was not enough for them. They want to kill everyone in the family by deportation," Mrs. Ajouri said.

On May 10, 26 Palestinian militants were expelled from Bethlehem to Gaza at the end of a 39-day Israeli siege at the Church of the Nativity. That case was not tested in court because it was the result of an agreement between Israel and the Palestinians.