Associated Press WriterJENIN, West Bank (AP) -- Braving the stench of death, Palestinian refugees searched for loved ones and possessions Thursday amid the devastation left by the Israeli incursion. A U.N. envoy said the attack caused "colossal suffering" and was unjustified.

Near Nablus, the Israeli military said it captured Husam Ataf Ali Badran, a leader of the Hamas militant organization who the army said was responsible for the deaths of more than 100 Israelis in some of the worst suicide bombings in the last year.

He reportedly had a hand in the March 27 Passover suicide bombing in Netanya that triggered the Israeli drive into Palestinian cities and towns. An army statement said his capture "is a significant blow" to Hamas. Witnesses said he was captured and three others were killed in a raid by helicopters firing rockets and machine guns outside the village of Beit Hassan.

Terje Larsen, the U.N. envoy, said 300 buildings were destroyed and 2,000 people were left homeless in the Jenin refugee camp, scene of the bloodiest fighting of Israel's three-week campaign to capture or kill armed militants in the West Bank.

"Not any objective can justify such action, with colossal suffering" to civilians, said Larsen, wearing a blue flak jacket and walking over a broad swathe of pulverized concrete where hundreds of people once lived.

Residents found the remains of two bodies and said one of them appeared to be that of Mahmoud Tawalbeh, the regional leader of militant Islamic Jihad. He had admitted sending suicide bombers to Israel, among them his younger brother. On April 11, Israel reported it believed its forces killed Tawalbeh.

So far, 30 bodies have been found in Jenin. The Palestinians accuse Israel of a massacre in the camp, but Israel says fewer than 100 people were killed, most of them militants. Israel lost 23 soldiers in the operation. The Israelis blame the Palestinians for the carnage, saying militants refused warnings to evacuate and then booby-trapped themselves and buildings.

Thirty-five more decomposing bodies were buried in Nablus when Israel lifted a curfew for three hours.

In Washington, President Bush said Israeli Prime Minister Ariel Sharon was keeping his promise to withdraw from the West Bank and was on schedule.

"He gave me a timetable and he met the timetable," Bush said.

Bush dismissed assessments that Secretary of State Colin Powell's Mideast mission, which ended Wednesday without a cease-fire, had failed and said the United States would continue to pursue a truce.

Powell's deputy for the Mideast, William Burns, arrived in Cairo on Thursday to follow up on the weeklong Powell trip, saying the first priority was to complete the Israeli withdrawal.

After that, he said, the United States hoped to arrange security consultations between the Israelis and Palestinians. Officials in Washington said CIA Director George Tenet would be in the region soon, perhaps by next week, to try to set up the Israeli-Palestinian talks.

In Ramallah, Palestinian leader Yasser Arafat was visited by Jordanian Foreign Minister Marwan Muasher and got a checkup from his neurologist, Dr. Ashraf al-Kurdi, who said Arafat was in good health.

Several years ago, Arafat developed tremors in his lower lip that doctors called a nervous tic. Media reports have speculated he suffers from Parkinson's disease, a degenerative neurological disease.

Arafat "is in high spirits, although his compound has been turned into a battlefield," Muasher said after returning to Amman, the Jordanian capital.

Sharon told Powell Israeli troops would complete their withdrawal from occupied West Bank towns by the end of the week, except for the siege around the Church of the Nativity in Bethlehem and Arafat's headquarters in Ramallah, where Israel says wanted men are holed up.

In Bethlehem, a meeting to negotiate a peaceful evacuation of the 250 people in the church, including many gunmen and about 50 clergymen, was canceled, said Mayor Hanna Nasser.

Powell described the siege of the church and the isolation of Arafat in Ramallah as key obstacles to a cease-fire agreement.

During a visit to a hospital on Thursday, Sharon repeated Israel's readiness to take part in a regional peace conference he first proposed during the Powell visit.

"When we will reach a cease-fire we, of course, will be happy to enter a peace process with a coalition, a coalition of peace with Israel, Egypt, Jordan, Saudi Arabia and perhaps Morocco and the Palestinians. That's not the situation today, but I hope we will reach this situation," Sharon said.

He also said, "Israel cannot accept international forces here," although he previously suggested he would allow U.S. observers to be stationed in the area. U.N. Secretary-General Kofi Annan has called for an armed international peacekeeping force to separate the two sides.

In Jenin, Larsen, the U.N. envoy, urged Israel to withdraw and immediately allow professional teams to search for survivors.

"Corpses were being dug up just below the surface and the stench is terrible," the Norwegian said. "This is horrifying beyond belief. Just seeing this area, it looks like there's been an earthquake here."

Danny Ayalon, Sharon's chief foreign policy adviser, denied Israel had blocked relief efforts.

"We have tried all along to work with the Palestinians to bury the dead, but the Palestinians refused," Ayalon said.

"What we see in Jenin is a result of die-hard terrorists there who booby-trapped themselves and all the places there," he told The Associated Press. Civilians "were given a chance to surrender and they didn't... The result of the destruction is their fault."

Hundreds of residents picked through the debris, pulling out mattresses and packing suitcases with salvaged clothes and other possessions. One woman found a functioning television in her gutted bedroom.

Yehya Hindi, with the shaggy look of a man unable to wash or shave for days, used a shove to pick through what had been the roof of his second-floor bedroom. He pulled out a stack of his son's school reports.

Hindi, 42, and his family hid in the house for six days, and had taken shelter in the basement when the first floor was blown away. After that, they fled.

"It would have been better to have stayed inside," said his brother Zaki, 36. "It would have been better to be dead and buried."