WASHINGTON (AP) -- The Bush administration said Thursday it is taking steps to designate the Al Aqsa brigades, a Palestinian militia, as a foreign terrorist organization.

The brigades are linked to the Fatah faction of Palestinian leader Yasser Arafat.

The disclosure came hours after Al Aqsa claimed responsibility for a terrorist act in a Jerusalem shopping area in which a Palestinian suicide bomber killed himself and two bystanders. At least 60 were wounded.

State Department spokesman Philip Reeker said Secretary of State Colin Powell began taking steps to designate Al-Aqsa a foreign terrorist organization on Tuesday and notified Congress on Wednesday.

It is illegal for Americans to provide financial support for groups so designated.

Reeker, asked about links between Al Aqsa and Arafat, said the connection between the group and the top Palestinian leadership was unclear.

The administration has come under strong pressure from members of Congress in recent days to declare Al Aqsa a terrorist organization.

After the suicide bombing, Powell called Arafat and demanded that he condemn the attack, Reeker said. Powell added, according to Reeker, "The time to act is now."

Powell telephoned Arafat while he was en route to Mexico with President Bush. Arafat condemned the attack in Jerusalem but it was unclear whether the comment came before or after his conversation with Powell.

Arafat promised to put an end to such attacks and to work toward a cease fire with Israel.