Israeli forces moved into a West Bank town and four villages near Jerusalem on Tuesday — a day after Prime Minister Ariel Sharon said operations were winding down. But he appeared to soften his resistance to dealing with Yasser Arafat.

Palestinians condemned the new incursions, and Secretary of State Colin Powell appeared ready to settle for something short of a formal cease-fire.

In Bethlehem, heavy gunfire could be heard near the Church of the Nativity on Tuesday evening, with flares and gray smoke visible over the compound. The army confirmed sporadic gunfire exchanges but said its forces had not entered the compound. One injury was reported, a Palestinian in nearby Beit Sahour hit in the leg by a stray bullet outside his house.

The United States has called for a full and immediate end to the Israeli military campaign, which Israel says is aimed at dismantling Palestinian militias behind deadly attacks on civilians.

Sharon said his forces would leave the cities of Jenin and Nablus — sites of the worst fighting — but vowed to keep Israeli troops in Ramallah and Bethlehem.

Sharon, who has been pressing for a peace summit including heads of Arab nations, said Tuesday he expected the Americans to call such a summit for June, perhaps in the United States.

In an interview with Israel TV, Sharon said a June summit was likely, and appeared to drop his opposition to involving Arafat, the Palestinian leader. Sharon said that who represents the Palestinians is "a secondary issue."

"It's not important to me which of them will be here," he said.

Sharon had previously said that he no longer considers Arafat a peace partner and other leadership should be found.

Mohammed Dahlan, the Gaza security chief who's been involved in past Israeli-Palestinian negotiations, said the Palestinians are open to a summit.

"We don't want a conference to cancel 10 years of negotiations, but a conference to achieve a solution based on two states, Palestine and Israel," he said.

Israel has reopened the Ketziot desert detention camp to hold some of the 4,250 Palestinians rounded up in its 19-day offensive, army officials confirmed Tuesday. More than 300 prisoners have been moved to the tent camp, according to the Israeli human rights group B'Tselem.

Thousands of Palestinians were held at Ketziot in the 1987-93 Palestinian uprising. The camp became notorious for its conditions, including searing daytime temperatures and biting cold at night; rights groups alleged prisoners were abused there.

Israeli Defense Minister Binyamin Ben-Eliezer, speaking on Israel Television, said Israeli forces should be repositioned just outside Palestinian-controlled towns by early next week.

Maj. Gen. Aharon Zeevi, the head of military intelligence, said even if troops pull out, it may not be for good.

"We're not afraid to go into the cities to get the terrorists," he said. "If we have to go in again, we'll go in again."

Israel said several members of the militant group Hamas were captured Tuesday in the West Bank. Since the military offensive began March 29, the army said, nearly 400 wanted Palestinians have been detained.

The military said forces were searching for suspects and weapons in the Askar refugee camp near Nablus as well as in the West Bank villages of Hirbet Beit Hassan, Luba Sharkiyeh, A-Ram and Anata.

Early Tuesday, Israeli troops re-entered Tulkarem, one of two towns they withdrew from April 9. The army said four Palestinian members of Hamas were arrested in Tulkarem, and eight other militants were seized in the West Bank towns of Beit Fajar and Fara.

In Nablus, troops ordered men out of apartment buildings and took them to a school, witnesses said. Among those detained and handcuffed was journalist Mohammed Daraghmeh, 38, who has covered the northern West Bank for The Associated Press since 1996.

The AP protested Daraghmeh's detention. Dan Seaman, director of Israel's Government Press Office, responded that "there's no immunity for journalists. He (Daraghmeh) is a Palestinian, and he was arrested like thousands of other Palestinians. He'll be questioned, and if there's no problem he'll be released."

Late Tuesday, Israeli military spokesman Rami Mardor said Daraghmeh had been released. However, his family had not yet heard from him.

Before dawn Tuesday, Israeli tanks and armored personnel carriers rolled into Abu Dis, Izzariyeh and Sawahra As-Sharkiyeh, three Palestinian suburbs of east Jerusalem. Troops declared a curfew, confining tens of thousands of residents to their homes, as part of a high security alert ahead of Israeli Independence Day.

An Israeli military official said information had been received indicating an attack was in the works and the attackers would be from Abu Dis and Izzariyeh.

Israeli forces later entered the nearby village of Issawiyah, this time ordering residents out of their houses, witnesses said. Israel Radio said suspected militants were arrested. The Israeli military had no comment.

Palestinian Parliament Speaker Ahmed Qureia, who lives in Abu Dis, said the raids belied Sharon's pledge to begin pulling back soldiers.

"What is needed is ... to stop these incursions and to withdraw immediately from Palestinian cities and villages," Qureia said. "Unfortunately, these incursions are taking place while Secretary Powell is in the country."

Powell met Tuesday with Sharon, and was to meet Palestinian leader Yasser Arafat on Wednesday at his besieged headquarters in Ramallah.

Powell said he hoped to work out something less than a formal cease-fire within 24 hours. "I think we are making progress," he said.

However, a senior Palestinian official said efforts to formulate a U.S.-Palestinian statement condemning suicide bombings and calling for an Israeli troop withdrawal had broken down. Palestinians insisted on statehood guarantees, the official said on condition of anonymity.