RAMALLAH, West Bank -- Israeli soldiers and elite forces on Monday captured Marwan Barghouti, a close aide to Palestinian leader Yasser Arafat and a leader of a group that has claimed responsibility for dozens of attacks against Israel, including suicide bombings.

The detention came on a day of both fighting and diplomacy, with Secretary of State Colin Powell shuttling among Mideast capitals, Palestinian medics retrieving bodies from the devastated Jenin refugee camp, and Israeli troops exchanging fire with armed Palestinians holed up in Bethlehem's besieged Church of the Nativity compound.

In an interview with CNN, Israeli Prime Minister Ariel Sharon said Monday that troops will be out of all West Bank cities except Ramallah and Bethlehem within a week.

"Altogether, we are on our way out," Sharon said. Israel, he said, has no intention to stay in "cities of terror."

Israeli troops also entered Abide and Deir Salah, two Palestinian villages near Bethlehem, as part of the 17-day-old military offensive in the West Bank, despite repeated U.S. calls for an end to such incursions, and doctors said two Palestinians were killed in Israeli raids.

Barghouti, 41, was detained at the house of Fatah official Ziad Abu Ain, who also was picked up in Ramallah, Palestinian West Bank security chief Jibril Rajoub told The Associated Press. He warned against harming Barghouti.

"Killing or humiliating him will bring catastrophes for Israel and will expand the circle of violence," he said.

Raanan Gissin, spokesman for Sharon, confirmed Barghouti's detention, together Ahmed Barghouti, a cousin and aide.

Barghouti, sometimes mentioned as a possible successor to Arafat, is a leading figure -- some say the leader -- in the Al Aqsa Martyrs Brigade. The militia has claimed responsibility for dozens of shooting attacks against Israelis and, in recent months, has begun staging suicide bombings as well.

House surrounded

The Israeli army said a force of infantry, armored corps and elite soldiers surrounded a house in northern Ramallah and ordered those inside to come out. After most of the occupants left the house, the elite force went in and arrested Barghouti. He and Ahmed Barghouti were passed on to security forces for interrogation, the army said in a statement.

According to Israel Radio, Barghouti initially told the soldiers in Hebrew, "I know you've come for me" -- but refused to come out of the building. The army then sent "an elite unit," and Barghouti agreed to come out without a fight, the radio said.

In Bethlehem, meanwhile, Israeli troops exchanged fire with armed Palestinians holed up in the Church of the Nativity compound, built over the grotto where tradition says Jesus was born.

Later Monday, two Palestinian policemen -- one seriously wounded and the other reportedly suffering a nervous breakdown -- surrendered to Israeli troops ringing the Bethlehem shrine, witnesses said. The pair became the first of more than 200 armed Palestinians to give themselves up in the 12-day standoff.

In Jenin, ambulances drove along the alleys of the refugee camp, which has been the scene of the deadliest fighting in the offensive. Israel and the Palestinians have argued over who will retrieve the bodies -- part of their bitter dispute over what happened in the weeklong battle.

On Sunday, the Israeli Supreme Court rejected an army plan to bury most of the bodies from the camp in an Israeli cemetery, and insisted the Red Cross monitor the gathering of the corpses.

Palestinians have charged that hundreds of people were killed in the camp, including many civilians, while Israel said about 100 died, most of them gunmen.

A buffer zone

Israel's Security Cabinet, meanwhile, approved the creation of "buffer zone" in the West Bank that is to make it harder for Palestinian militants to infiltrate into Israel. Fences and other barriers are to be erected along parts of the buffer zone, including in the Jerusalem area.

Cabinet Secretary Gideon Saar emphasized that Israel was not erecting a border unilaterally. "We are not talking about a continuous fence, but about different types of obstacles at different places," said Saar.

He said National Security Council head Uzi Dayan proposed blocking roads between the West Bank and Israel and authorizing a few crossing points for goods.

The cease-fire line between Israel and the West Bank has never been fortified, as Israeli governments do not recognize it as a border. Lack of a fence means that Palestinians can easily cross into Israel. Thousands enter illegally every day, looking for work, and so do suicide bombers and other attackers.