"Both leaders agreed on the need for restraint by all parties to avoid further escalation in the area," National Security Council spokeswoman Mary Ellen Countryman said, adding that the call lasted about 15 minutes.
Mr. Bush's call came after three Palestinian mortar attacks launched from Gaza slammed into Israel targets apparently the most in a single day since the present Palestinian uprising started seven months ago.
Israeli sources said from Jerusalem that Sharon told Mr. Bush that Palestinian President Yasser Arafat's Palestinian Authority was doing nothing to stop the violence, compelling Israel to defend itself.
In Wednesday's incursion, Palestinian security officials said Israeli tanks and army bulldozers entered an area of the Gaza Strip near the Egyptian border, stayed for about 45 minutes and destroyed a police station.
Israel's army said the "pinpoint operation" to destroy the station was a reaction to gunfire from the building. There were no immediate reports of injuries.
Israel withdrew from the other Palestinian-controlled area on Tuesday, after a stinging criticism by U.S. Secretary of State Colin Powell that its "response was excessive and disproportionate." Israel said the retreat had been scheduled
In the Middle East, where words are weighed carefully, Powell's criticism of Israel could be viewed as a watershed event.
Israeli Foreign Minister Shimon Peres spoke to Powell by phone Wednesday, and said Powell's earlier criticism resulted from a "problem with communication."
Sharon's aides denied there had been a hasty about-face following the U.S. condemnation, the harshest rebuke of Israel since Bush took office three months ago.
Palestinian parliament speaker Ahmed Qureia praised the U.S. stand against the Israeli incursion. He said it showed that the United States can play an active role in Middle East peacemaking and "can impose this role on Israel."
Israel's incursion Tuesday into a square mile of northern Gaza had been triggered by mortar fire on the Israeli town of Sderot. Before the announced withdrawal, Israeli officials had said they might keep the area for months.
During the brief takeover, Israeli troops razed six Palestinian police stations under heavy tank fire, killing a Palestinian policeman.
Shortly after Israeli troops pulled out, six more mortars struck near the Neve Dekalim settlement in Gaza and close to an Israeli army positions. One shell landed near a chool. No one was injured.
The State Department said Wednesday said that despite urgent U.S. appeals, Palestinian leaders have not taken adequate steps to curb violence against Israel.
"We haven't seen on the Palestinian side the kind of calls for an end to violence (and) to stop the shootings," department spokesman Richard Boucher said.
After nightfall Wednesday, five mortar shells landed at Nir Am, an Israeli village just outside the Gaza border fence, the military said. Mortar bombs also landed at the isolated Gaza Jewish settlement of Kfar Darom. No injuries were reported.
Fierce exchanges of fire took place between the Palestinian town of Beit Jalla and Israeli positions near the Jewish neighborhood of Gilo in a disputed part of Jerusalem.
Also, Israeli tanks fired shells at a police post in Beit Hanoun in northern Gaza, Palestinians said. The post was damaged, but no one was hurt.
At least 381 Palestinians, 13 Israeli Arabs and 71 other Israelis have died since the present Palestinian uprising began in September with the breakdown of peace talks.
Palestinian Information Minister Yasser Abed Rabbo condemned the Israeli action and called for "international protection for the civilian Palestinian areas."
"All this aggression against Palestinians is a clear message," he said. "Our only way of responding as a Palestinian Authority is by popular resistance."
President Bashar al-Assad, in his strongest reaction so far to the Israeli strike against a Syrian radar base in Lebanon, said on Wednesday the country would not stand idly by as Israel mounted attacks, his spokesman said.
An Israeli air raid early on Monday which killed three Syrian soldiers and wounded six others in eastern Lebanon. Israel said it launched the raid in retaliation for the killing of one of its soldiers by the Hizbollah guerrilla group on Saturday.
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