Forty-six people were taken to hospitals, at least six of them suffering from serious wounds, ambulance workers said. The wounds of two people were said to be moderate while another 38 were called lightly hurt. 

The gunman was killed by police, Jerusalem Police Chief Mikki Levy said
 

Karmi gained a spot on Israel's most-wanted list after taking responsibility for the deaths last year of two Tel Aviv restaurant owners who were killed in Tulkarem. Israeli authorities have also accused him of being involved in the deaths of eight other Israelis. 

The Israel Defense Forces said the Nablus raid targeted an explosives laboratory, and said the people killed were terrorists. The raid prompted a vow by the Islamic fundamentalist group Hamas that it would wage an "all out war" against Israel. 

Meanwhile, the IDF said its troops began withdrawing from the West Bank town of Tulkarem; Palestinians disputed that assertion. 

In Ramallah Tuesday, a Palestinian Authority spokesman blamed the Jerusalem shooting on Israeli Prime Minister Ariel Sharon. 

"Sharon is responsible for what's happening," said Nabil Abu Redeneh, a spokesman for Arafat. "He is responsible for the cycle of killings and escalations. Until the United States is convinced that there should be a political resolution to this conflict, there will be no end to the cycle of violence." 

But Ra'anan Gissin, a spokesman for Sharon, blamed Arafat. He said it is now clear that "the attack today is part of deliberate campaign of Mr. Arafat and PLO to escalate the situation." 

Tuesday's shooting in Jerusalem and raid in Nablus were the latest developments in a recent upsurge of violence that has seen increased attacks by Palestinian militants against Israeli soldiers and civilians followed by retaliatory strikes by Israel. Political relations between the two sides were further strained by the discovery of a shipload of missiles and other arms that Israel says was destined for the Palestinians. 

In Nablus, nine people were arrested on top of what the IDF reported as four dead, during what the IDF said was an exchange of fire. The IDF said during its raid that troops "found an explosives lab and a large amount of explosives." 

Palestinian sources disputed the assertion there was a gun battle. The Palestinians called the raid an assassination, saying four people were shot at close range, three as they lay in their beds and one who was taking a shower. 

Palestinian sources said four of those killed were members of Hamas, an organization known among Palestinians on the West Bank and Gaza Strip for actions such as building schools, hospitals and helping the community in social and religious ways. Its military wing, Izzedine al Quassam, has carried out suicide bombings and other attacks on Israeli civilians. 

A short time after the raid, Hamas sent a message to several news agencies saying it would wage an "all out war" against Israel. 

According to Palestinian security sources the four killed in the Nablus raid were Youssef Surabgi, Nassim Abu al Russ, Jasser Samaro and Karim Mafarjeh. 

Israeli security sources said two of the dead men -- Jasser Samaro and Nassim Abu al Russ -- were involved in building bombs used in terror attacks in Haifa, at the Sbarro pizzeria in Jerusalem and at the Dolphinarium in Tel Aviv. 

Israelis say they target terrorists in Tulkarem
The seizure of Tulkarem Monday marked the first time the Israeli military has taken control of an entire Palestinian town since the current Palestinian uprising began 16 months ago. The IDF said it "successfully completed its mission and is currently stationed around the city, prepared for any eventuality." 

Lt. Gen. Shaul Moffaz, chief of the IDF general staff, said Israeli troops had arrested "20 terror supporters" including four people on Israel's most wanted list. 

Palestinians said at least four Palestinians were killed and 50 wounded in Tulkarem and Ramallah during Israeli operations Monday. 

Israeli Prime Minister Ariel Sharon said Arafat would not be allowed to travel to a meeting of the Arab League in Morocco until he arrested those responsible for killing Israeli Cabinet member Rechavam Ze'evi last October. 

Israel has essentially left Arafat marooned at his Ramallah headquarters -- Israeli tanks now poised 70 yards away -- since early December. 

Al Aqsa said if Israel did not lift the travel ban on Arafat within 24-hours, it would launch a new wave of attacks on Israelis. 

In a separate statement on Tulkarem, the IDF said its military operation had lasted about 30 hours and involved searching for and detaining terrorists and dismantling terror infrastructure. The IDF said the operation was carried out only after the Palestinian Authority failed to thwart the terrorism launched from Tulkarem and other places. 

"There were several demonstrations, riots and a few firefights which resulted from fire opened on IDF forces in the city. This resulted in the deaths of two armed Palestinians and the injury of tens of others," the IDF statement said. 

The Tulkarem operation followed a terror attack last week in the Israeli city of Hadera, where a gunman killed six Israelis at a bat Mitzvah celebration before he was shot and killed. 

Al Aqsa claimed responsibility for that attack, saying it was in response to the death of Karmi, the popular Fatah leader who was killed in a January 14 explosion in Tulkarem. 

Palestinians blamed the death of Karmi on Israel. Israeli authorities would neither confirm nor deny involvement in Karmi's death. 

Arafat on Monday condemned the Israeli actions in Tulkarem. "We tell these Israeli tanks that this is not the first or last time that you have blockaded us, and if you remember the last time in Beirut what happened to you. And it's either you or us, and time will tell," he said. 

Israel Radio quoted Israeli commanders as saying the Palestinians had fired a rocket propelled grenade at a tank on the West Bank, the first time that weapon had been used. 

In addition, the report said Israelis believed the Palestinians were now building Kasam rockets, weapons capable of 10 kilograms (20 pounds) of explosives. 

Arafat has come under increasing pressure since last year from the United States, Israel and Europe to crack down on terrorists in territory under Palestinian control since a string of December attacks killed more than 30 Israelis. Arafat called for a cease-fire in mid-December, but Israel has said the Palestinian leader has not done enough to crack down on terrorists.