Elsewhere in the West Bank, Israeli troops killed a 16-year-old Palestinian and wounded five in a gun battle, the military said.
Tanks and armored personnel carriers began rolling into Nablus and Jenin early Thursday, searching for Palestinian militants and bomb-making laboratories, officials said.
The raid came shortly after a tense meeting of Palestinian Prime Minister Mahmoud Abbas, Yasser Arafat and other officials. Participants said leaders' voices rose to shouts as they disagreed over how to clamp down on militants following Tuesday's bus bombing that killed 20 people.
Some reports said Abbas threatened to resign if Arafat didn't back him in a crackdown on the militants. The talks ended with a joint statement that included few specifics on concrete steps.
As the leaders met in Ramallah, a column of 13 Israeli tanks was seen lining up outside the West Bank town, where Arafat's headquarters is located. However, the tanks did not move in, and Israeli security officials indicated Arafat's compound would not be targeted, as it was in previous raids.
Israel's Security Cabinet, meanwhile, decided in principle to resume the practice of "targeted killings" and approved a series of military strikes against Palestinian militants. Israeli officials said the intensity of those strikes would depend on what action, if any, Palestinian security forces take against Hamas and Islamic Jihad.
The militant groups have said they will avenge the killing of any of their operatives by Israeli troops with more shootings and bombings. Israel had suspended the practice after Palestinian militant groups declared a unilateral cease-fire June 29.
Israeli troops regularly storm West Bank towns in search of wanted militants, but the scale of Thursday morning's operation was larger than usual. Nevertheless, security officials said Israel was not planning a call-up of reserves or a massive offensive like operations carried out last year.
Also Thursday, Israeli troops in Hebron demolished the home of the suicide bomber who blew up the bus on Tuesday. His family had already moved out with their possessions, since it is Israeli policy to destroy the family homes of suicide bombers.
The bomber, 29-year-old mosque preacher Raed Mesk, was friends
with an Islamic Jihad leader in Hebron, Mohammed Sidr, who was
killed by Israeli troops last week.
Tuesday's bus bombing in Jerusalem was the deadliest attack since President Bush unveiled the "road map" plan in May. Six children, ranging in age from 3 months to 15 years, were among the dead, and more than 100 people were injured. The Palestinian militant group Hamas claimed responsibility.
In Washington, the Bush administration Wednesday called for an immediate crackdown by the Palestinian Authority on extremist groups and the dismantling of their terrorist capabilities.
"There's funding, there's support, there's munitions, there's organization, and all that needs to be taken apart," State Department spokesman Richard Boucher said.
U.S. officials expressed understanding of Israeli Prime Minister Ariel Sharon's decision to postpone pullbacks on the West Bank, but the overriding U.S. message was that the American plan for a Palestinian state remains on track.
Referring also to the bombing Tuesday of U.N. headquarters in Iraq, Boucher said "our reaction to the horrible events is that we need to move forward, we need to establish peace and security for people in Iraq, Palestinians, Israelis, others."
The Bush administration's Mideast policy is based on the idea a democratic Palestinian state can be established in two years on land held by Israel and live in peace alongside Israel.
Secretary of State Colin Powell conveyed the U.S. call for a crackdown on terror operations in a telephone call to Mahmoud Abbas, the Palestinian prime minister, who has shied away from a confrontation with Hamas, Islamic Jihad and other extremist groups on the argument that it could touch of a civil war.
President Bush telephoned Sharon to express his condolences for the bus bombing, and National Security Advisor Condoleezza Rice telephoned Israeli and Palestinian officials.
Early Thursday, shots rang out in Jenin before dawn after some 20 tanks, personnel carriers and other vehicles entered the town, but there were no immediate reports of casualties either there or in Nablus. A curfew was imposed in central Nablus after more than 30 vehicles - mostly trucks and a few tanks - rolled in during the night.
Soldiers conducting house-to-house raids in Nablus forced people from their homes. Soldiers arrested at least 14 Palestinians in and around Nablus during the night, including a Hamas member caught with a large quantity of explosives, the army and witnesses said.
Six others were arrested in the Jenin area Wednesday night, while one 16-year-old was shot and killed by troops in Tulkarem, witnesses said. The army said Israeli troops returned fire when fired upon. But Palestinian witnesses said the teenager was unarmed.
During Wednesday night's talks with Palestinian Cabinet ministers and PLO officials, Abbas suggested strong action, such as freezing militant groups' bank accounts and outlawing the military wings of Hamas and Islamic Jihad, some participants said.
However, Palestinian officials said Arafat was concerned that an overly tough crackdown could spark civil war.
A statement issued after the talks included pledges of moving ahead with commitments under the U.S.-backed "road map" peace plan, which calls for the Palestinians to dismantle violent groups. The statement said the Palestinian Authority was committed to confiscating militants' weapons and would ban public demonstrations by militant groups.
Abbas was appointed in April after U.S. and Israeli pressure for an alternative to Arafat.
Arafat, who has been accused by Israel of supporting terrorism, has repeatedly criticized Abbas, saying his agreements with Israel amount to very little.
Abbas ordered the arrests Wednesday of suspects directly involved in Tuesday's bombing, but said he would not take broader action against militant groups without the backing of Arafat.
Sharon's office, meanwhile, issued a statement warning the Palestinian Authority that if it "does not take all the necessary steps in the war against terror, real and substantial steps, it will not be possible to advance on the diplomatic track."