JERUSALEM -- In a rare note of optimism, Israeli Prime Minister Ariel Sharon said preparations for a new Palestinian security apparatus -- a key demand of the United States and Israel -- should begin this month.

Even so, Sharon said the Palestinians have failed to keep their part of a tentative truce agreement. In a radio interview aired Saturday, the Jewish New Year, he also repeated demands for a total cessation of violence and an overhaul of the Palestinian Authority before the moribund peace process can be revived.

Early Saturday, Israeli troops moved into the Gaza Strip town of Deir el Balah, detaining six men and destroying two buildings, one of which the army says was used to make weapons -- a claim the Palestinians denied. The army said it also searched a Gaza office belonging to Yasser Arafat's Fatah movement and found a "powerful explosive device."

Army probe denounced

Also on Saturday, in the West Bank city of Hebron, Israeli soldiers arrested leading Hamas militant Hisham Sharabaty. Palestinians said Sharabaty, long wanted by Israel, had been living at large for years and was arrested at his home during a rare visit.

Meanwhile, Palestinians denounced an army investigation that cleared Israeli soldiers of misconduct in the deaths of 12 Palestinians last week, calling it a whitewash.

About 200 Palestinian students in the northern town of Jenin defied a curfew imposed on most West Bank towns Saturday to keep militants penned in during the Jewish New Year. They hurled stones at Israeli armored vehicles, which responded with automatic weapons fire, witnesses said. Hospital staff said four young people were injured, two seriously.

The army said it was unaware of any large-scale demonstration in the town but that a gunman shot at an Israeli patrol there and troops fired back, wounding the attacker.

Palestinian youths in Ramallah also broke the curfew. Dozens of boys from the al Amari refugee camp threw stones at Israeli army vehicles. Troops responded with tear gas and rubber bullets. No injuries were reported.

Israelis and Palestinians have been locked in a two-year cycle of violence in which 1,850 people have been killed on the Palestinian side and 610 on the Israeli side, many in Palestinian suicide bombings.

After a spate of such attacks in Israel this spring, Israel clamped down on the West Bank and Gaza Strip, confining hundreds of thousands of people to their homes for days at a time and paralyzing the economy.

Speaking to Israeli Army Radio, Sharon said the rehabilitation of the Palestinian security forces was imminent.

"Training and preparation of a new security apparatus will, I estimate, begin during the course of this month," he said. "That's a beginning."

Palestinian Interior Minister Abdel Razak Yehiyeh told The Associated Press late Saturday that there's not going to be a new security apparatus but rather a "refresher" course for the already existing security forces.

"It will be training for a group of officers and members in the already existing security apparatuses ... since they were not able to get any security or military training over the last two years," he said.

The United States and Israel have demanded that the Palestinian Authority undergo a thorough overhaul, including the security forces. Israel accuses Arafat of stoking the violence for the past two years and refuses to deal with him.

Sharon said the security forces under Arafat had degenerated into terror organizations. Israel and the United States have called for the various, often competing security services to be merged into one unified force.

For the peace process to resume, "there must be genuine reform, not what Arafat is talking about at the moment," Sharon said. "Those are games. There's nothing real there."

Sharon said a tentative deal reached last month calling for Israeli pullbacks in exchange for Palestinian assurances against terror was going nowhere. The army has already pulled out of the West Bank town of Bethlehem as part of the arrangement, and was supposed to have done the same in parts of the Gaza Strip.

Sharon said Gaza is the place where Palestinians are best equipped to keep order but have failed to do so, referring to a series of recent attacks there against Israelis.

Yehiyeh, however, said Israeli Foreign Minister Shimon Peres will meet senior Palestinian officials on Tuesday to discuss implementation of the so-called "Gaza-Bethlehem first" agreement.

Just before the start of the Jewish New Year at sundown Friday, the military released the results of an investigation into the killings of 12 Palestinians by Israeli soldiers over four days last week.

The report said those killed were either behaving suspiciously or hit unintentionally by Israeli fire. The report said soldiers acted in accordance with regulations when they opened fire.

Responding to the findings, Palestinian Cabinet Minister Saeb Erekat said it was "shameful for Israel not to bring to justice those who kill innocent children, innocent mothers in cold blood."

Also Saturday, a 75-year-old French Jewish lawyer named Gisele Halimi announced that she would defend Marwan Barghouti, the Palestinian uprising leader on trial in Israel for alleged terrorism.

Barghouti last week dismissed his local attorneys, preferring to defend himself, but Halimi said at a press conference in Jerusalem that the defendant had agreed to retain her.