JENIN REFUGEE CAMP, West Bank – Palestinian medics began retrieving bodies from this devastated refugee camp Monday, and Israeli troops exchanged fire with armed Palestinians holed up in Bethlehem's besieged Church of the Nativity.
Israeli troops also entered two Palestinian villages near Bethlehem as part of the 17-day-old military offensive in the West Bank, despite repeated U.S. calls for an end to such incursions, and doctors said two Palestinians were killed in Israeli raids.
In Jenin, ambulances drove along the alleys of the shantytown, which has been the scene of the deadliest fighting in the offensive. Israel and the Palestinians have argued over who will retrieve the bodies -- part of their bitter dispute over what happened in the weeklong battle.
On Sunday, the Israeli Supreme Court rejected an army plan to bury most of the bodies from the camp in an Israeli cemetery, and insisted the Red Cross monitor the gathering of the corpses.
Palestinians have charged that hundreds of people have been killed in the camp, including many civilians, while Israel said about 100 died, most of them gunmen.
Palestinian medical officials said troops were making the work of the medic crews more difficult by stopping ambulances repeatedly for searches and ID checks.
Fadi Jarar, a medic for the Palestinian Red Crescent, said his crew discovered one body under a collapsed three-story building. "We couldn't pull it out because we were afraid the rubble would collapse on us," Jarar said.
In Israel, meanwhile, Prime Minister Ariel Sharon called for a Mideast peace conference led by the United States. Sharon told a meeting of business leaders Sunday that he brought up the idea in a meeting with Secretary of State Colin Powell, and "this idea is acceptable to the United States."
Sharon proposed that Israel, Egypt, Saudi Arabia, Jordan, Morocco and Palestinian representatives take part. Sharon envisions a conference without Palestinian leader Yasser Arafat, whom he has branded a terrorist, his advisers said.
"It's really possible" to have a conference without Arafat, said Israeli Justice Minister Meir Shetreet. "Arafat is no longer the head of a state or someone who wants to be the head of state, he's the head of a terror organization."
A senior U.S. official said the idea was discussed as part of a way to move forward politically, but more talks were needed.
Arafat expressed conditional acceptance of the idea. In a phone call to Fox News, he said, "I am ready for immediate conference, but at the same time immediate withdrawal of Israeli forces." He did not address Sharon's demand that he be excluded from such a conference.
However, Palestinian negotiator Saeb Erekat was critical.
"This is an attempt by Sharon to turn the clock many years backward," he said. Erekat said there is an Arab proposal on the table for Israel to withdraw from all of the West Bank, Gaza Strip, east Jerusalem and Golan Heights in exchange for peace, "and what is needed from Sharon is to say yes or no to this initiative."
Powell met separately Sunday with Arafat and Sharon, but no progress toward a truce was reported.
On Monday, Powell took soundings in Syria and Lebanon on a peace conference and warned leaders of the two nations that guerrilla attacks on Israel could spill over into a wider conflict.
Powell said in Damascus that he wanted Syrian President Bashar Assad's assessment on "a way forward to negotiations" to settle the Arab-Israeli conflict.
In Bethlehem, Israeli troops exchanged fire with Palestinian gunmen, who have been holed up inside the Church of the Nativity, one of Christianity's holiest shrines. Two Israeli soldiers and a Palestinian were lightly hurt. The army said troops conducted searches in the Palace Hotel on Manger Square, which overlooks the church, built over the grotto where tradition holds Jesus was born.
Negotiations over the fate of the gunmen have been bogged down for days, with the Palestinians rejecting Israel's latest offer -- permanent exile or trial in Israel for those among the people in the church who are wanted by Israel.
Also Monday, Israeli forces entered two villages east of Bethlehem, Abdia and Deir Salah, expanding the military offensive despite repeated calls by the United States to halt the incursions. A Palestinian motorist driving near Abdia was killed by army fire, Palestinian doctors said. The army confirmed the incursions but had no comment on the death.
In Doha, another village near Bethlehem, a Palestinian woman was killed when Israeli troops blew open the door to her home, apparently as part of a hunt for wanted men, Palestinian doctors said.
Israel's security Cabinet, meanwhile, approved the creation of "buffer zone" in the West Bank that is to make it harder for Palestinian militants to infiltrate into Israel. Fences and other barriers are to be erected along parts of the buffer zone, including in the Jerusalem area.
Cabinet Secretary Gideon Saar emphasized that Israel was not erecting a border unilaterally. "We are not talking about a continuous fence, but about different types of obstacles at different places," said Saar.
He said National Security Council head Uzi Dayan proposed blocking roads between the West Bank and Israel and authorizing a few crossing points for goods.
The cease-fire line between Israel and the West Bank has never been fortified, as Israeli governments do not recognize it as a border. Lack of a fence means that Palestinians can easily cross into Israel. Thousands enter illegally every day, looking for work, and so do suicide bombers and other attackers.
Israel Radio said 14 more bodies were found Monday in the Jenin camp, but only seven were removed because some camp areas remain booby-trapped.
Medics in surgical masks, latex gloves and white uniforms placed gallons of drinking water in the streets, and residents took them into their homes.
Dr. Tim Keenan, who headed one of the Red Cross teams, said water and electricity to the local hospital had been restored. He said his first priority was to look for wounded people. Before the search began, the medics and ambulances were thoroughly searched by Israel troops, Keenan said.
After banning reporters from the camp throughout the battle, the Israeli military took a group of journalists through on Sunday. Soldiers said then they had found 40 bodies so far, most of them gunmen.
Reporters accompanying medics entered a house where they saw six bodies blackened by an explosion or fire. Several of the bodies had been covered with blankets. The dead appeared to have been policemen -- several of them wore black uniforms. In another house, a dead man lay in a doorway, apparently a civilian. He was slumped forward.
There was widespread destruction in the camp, where tanks and bulldozers knocked over buildings in their street-to-street fight. In some places, rubble was piled two stories high, with pieces of furniture and personal possessions mixed with broken concrete.
The powerful stench of sewage mixed with garbage strewn on the camp's narrow alleyways. Many houses were empty, some with their front doors open.
Some homes had their windows shut, but the sound of children playing and the aroma of baking bread wafted through, indicating that some people were still around.