JERUSALEM Ñ The Palestinian Authority has defied an Israeli incursion into its territory and launched mortar attacks on Jerusalem.

Palestinian gunners launched mortars and automatic fire from the Bethlehem area toward the southern Jerusalem neighborhood of Gilo. The mortar fire continued on Wednesday and shells struck an apartment building. Nobody was injured.

Israeli tanks responded with fire toward the Aida refugee camp on the outskirts of Bethlehem. Palestinian sources said six Palestinians were injured.

The Palestinian attacks came despite an Israeli military presence in the neighboring Bethlehem suburb of Bet Jallah. Foreign Minister Shimon Peres telephoned PA Chairman Yasser Arafat in an effort to arrange a ceasefire.

Palestinian sources said Arafat refused to pledge to end the fighting.

On Wednesday, a Palestinian motorist was killed and two others were injured in an ambush near the West Bank Jewish settlement of Mishor Adumim.

An anonymous group said the attack was in revenge to an earlier Palestinian killing of a Jewish settler.

Hours later, an Israeli motorist was killed in a Palestinian ambush near the West Bank city of Nablus.

Israel has linked a military withdrawal from Bet Jallah to an end to Palestinian attacks on neighboring Jerusalem. Israeli officials said the Cabinet of Prime Minister Ariel Sharon authorized troops and tanks to remain on the outskirts of the Bethlehem suburb until Palestinian sniper fire ceases.

Officials said they were not surprised by the Palestinian attacks. They said the government and military had predicted the PA response to the Israeli incursion in Bet Jallah. The latest Palestinian fire, the officials said, stems from Bethlehem rather than Bet Jallah.

Tanks, troops and armored vehicles punched into Bet Jallah on early Tuesday after Palestinian gunners launched attacks that injured Jerusalem residents and damaged their homes.

The Israeli military task force captured five buildings on the outskirts of Bet Jallah about 300 meters within Palestinian Authority territory. The buildings were said to be outposts for Palestinian gunners who targeted Jerusalem.

In Washington, the State Department called on the PA to stop attacks on Jerusalem and on Israel to withdraw from Bet Jallah.

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