JERUSALEM (AP) Standing firm on tough conditions, Israeli Prime Minister Ariel Sharon said yesterday his troops would not release their hold on six West Bank towns until the Palestinians turn over the militants who assassinated an Israeli Cabinet minister.

The U.S. government, meanwhile, issued its strongest denunciation of the Israeli operation yesterday, demanding that Israel pull out immediately and make no further incursions.

In Jerusalem, thousands of Israeli demonstrators demanded that Sharon expel Palestinian leader Yasser Arafat and bring down his Palestinian Authority.

Israeli tanks rumbled deeper into Palestinian towns, setting off street battles for a fifth day. In Tulkarem, a 65-year-old Palestinian man was killed, Palestinians said.

A leaflet issued in Bethlehem by Arafat"s Fatah faction warned that if Israeli tanks did not withdraw from the biblical town, "Our bullets will fall like the rain on Gilo."

Gilo is a Jewish neighborhood built on disputed land on Jerusalem"s southern fringe, and gunfire there set off the incursion early Friday.

In the Aida refugee camp outside Bethlehem, a heavy gunbattle erupted as tanks rolled in. In Ramallah, tanks fired shells as they moved forward, and were met by Palestinian fire. One Palestinian was wounded, doctors said. Overnight, Israeli army bulldozers destroyed the headquarters of Force 17, one of the Palestinian security services, in Ramallah. Israel said Force 17 members were suspected of having killed 10 Israelis in shooting attacks.

In Nablus, one Palestinian was killed and a second injured in a blast in a car, Palestinians said, claiming the dead man was a senior Hamas bomb-maker on Israel"s wanted list.

The Palestinians charged Israel was behind the explosion. The Israeli army refused to comment.

A 19-year-old Palestinian policeman from Bethlehem died yesterday from wounds suffered two days earlier, doctors said.

Since the current round of violence began in September 2000, 704 people have been killed on the Palestinian side and 186 on the Israeli side.

Speaking to party activists in Tel Aviv, Sharon repeated his main demand, already rejected by the Palestinians, that militants who gunned down Tourism Minister Rehavam Zeevi on Wednesday be handed over to Israel.

"We are not willing to make any compromises concerning a complete halt of terrorism, the dismantling of terror groups acting against us and the extradition of the killers of minister Zeevi and those who sent them," Sharon said.

In Washington, State Department spokesman Philip Reeker gave the harshest criticism yet of the incursions and the deaths of civilians. "Israel Defense Forces should be withdrawn immediately from all Palestinian-controlled areas, and no further such incursions should be made," Reeker said.

Israeli media report a deep rift between Israel and the United States over the incursion, reflecting U.S. concern that Mideast violence could sabotage efforts to bring moderate Arab states into its anti-terrorism coalition.