Associated Press

Israeli girls embrace during the funeral of 14-year-old Menashe Regev in Jerusalem. Regev was killed Sunday when a Palestinian militant opened fire on a bus in Jerusalem, killing two teenagers.

JERUSALEM - A bomb exploded in a Jewish settlement yesterday, prompting Israel to halt a planned troop pullout from the West Bank town of Jenin after withdrawing from a smaller Palestinian town early in the day.

Israeli officials stressed, however, that the army still intended to leave Jenin and two other towns it entered nearly three weeks ago to root out militants - as long as the Palestinian Authority ensures calm in those areas.

The bomb exploded in a factory cafeteria, injuring three people in the settlement of Shaked, six miles west of Jenin. The militant group Islamic Jihad claimed responsibility.

"Everything in that area will have to be postponed," said Raanan Gissin, an aide to Israeli Prime Minister Ariel Sharon. "We will not exit right now."

Earlier, about 22 Israeli tanks rumbled out of Qalqilya, pulling back a few hundred yards from Palestinian territory. Qalqilya is on the edge of the West Bank, next to Israel.

The body of a Palestinian policeman, missing since the Qalqilya incursion began two weeks ago, was found yesterday after the Israelis pulled out, Palestinian security officials said. Doctors said he was hit by machine gun bullets.

On Sunday, a Palestinian shooting attack on a bus in a disputed section of Jerusalem killed two teen-agers, one of them a U.S.-born settler. Police said the gunman was a member of Islamic Jihad.

In 13 months of fighting, 741 people have been killed on the Palestinian side and 194 on the Israeli side.

Israel sent forces into parts of six West Bank towns after Palestinian militants assassinated Tourism Minister Rehavam Zeevi on Oct. 17. The militants were avenging Israel's killing of the leader of the militant Popular Front for the Liberation of Palestine.

Israeli troops remain in areas of Jenin, Ramallah and Tulkarem.

During the incursions, 42 armed militants were killed in clashes with Israeli forces and 15 others were killed in targeted operations by special forces, Sharon said.

He said Israeli forces had arrested 85 suspected militants.

The United States has demanded Israel pull its forces out of the West Bank towns, concerned that Mideast tensions could interfere with its effort to maintain support among moderate Arab nations for its war in Afghanistan.

Washington has also demanded that Palestinian leader Yasser Arafat crack down on militants.

Yesterday, U.S. Ambassador Daniel Kurtzer told the Foreign Press Association that Arafat must do more, including shutting down some militant groups and deciding "where he stands" on the issue of terrorism.

"We are concerned that some of these groups have in fact turned quite specifically to terrorism," Kurtzer said.

Palestinian Parliament Speaker Ahmed Quriea brushed aside the criticism, and said the best way the United States could bring peace to the region would be to recognize a Palestinian state.

Quriea also criticized the Israeli pullout from Qalqilya, saying it didn't go far enough and that Israel should withdraw from all West Bank areas it occupied.

Gissin said Israel intended to pull back its forces from all West Bank areas, provided the Palestinians assume security in the areas and prevent attacks on Israelis.

"We want to accomplish it as soon as possible," Gissin said. "The goals remain the same: to bring about a complete cessation of violence."

He said Sharon wanted to remain in Israel to oversee the pullout of forces, but was arranging to travel to the United States at the end of the month. Sharon on Saturday canceled a planned U.S. and British visit scheduled to start this week, saying the security situation required he remain at home.

Also yesterday, Sharon's office announced that the Shin Bet security service had arrested six members of the Tanzim militia, which is affiliated with Arafat's Fatah movement, in connection with an August shooting that killed one woman and a string of other attacks.

The six militiamen were arrested in September and early October. Israeli security services often release information about arrests only after their investigations are complete.