Jerusalem ? Israeli officials sought to discredit Palestinian leader Yasser Arafat on Tuesday by releasing a document they say links him directly to terrorism, while Prime Minister Ariel Sharon offered him a “one-way ticket” to exile.

The Israeli military accelerated its efforts to dismantle Arafat’s Palestinian Authority, rounding up hundreds of prisoners and targeting his key lieutenants.

Israeli tanks before dawn today rolled into two West Bank towns, exchanging fire with Palestinian fighters, witnesses said. The incursions followed a day of wild fighting as Palestinian gunmen forced their way into the Church of the Nativity, where tradition says Jesus was born.

The Israeli moves into Salfeet and Jenin, a northern town that has been home to some of the suicide bombers who have been terrorizing Israelis, came a day after Israel seized control of Bethlehem and another West Bank town.

At least 30 tanks rumbled into Jenin from all sides, opening the sixth day of a crushing offensive designed to root out Palestinian terrorists. They exchanged heavy machine gun fire with Palestinians in the city and at the entrance of a refugee camp, witnesses said. Tanks were taking up positions in Salfeet. Witness said the Israelis did not appear to be meeting with armed resistance there.

Sharon’s government seemed increasingly bent on eliminating Arafat’s power base as well.

The document released allegedly is an expense reimbursement request dated Sept. 16, 2001, from the al Aqsa Martyrs’ Brigades, which has conducted many of the bombings, to Fouad Shoubaki, the head of Arafat’s financial administration and a close aide. The document was found at Arafat’s Ramallah compound.

It requests reimbursement for several expenses, including 20,000 Israeli shekels ($4,200) for “various electrical components and chemical supplies (for the production of charges and bombs),” according to the Israeli government’s translation of the document’s original Arabic. “This has been our largest expense,” it says, citing a cost of 700 shekels ($146) per bomb. “We need about 5-9 bombs a week for our cells in various areas.”

The document is a “terror invoice,” said Col. Miri Eizin, an Israeli military intelligence officer. She said she did not know whether the reimbursement had been made.

While President Bush has called daily for Arafat to do more to halt the terrorist attacks, Sharon and his aides appear to have concluded that he never will. They are targeting the infrastructure and many of the personnel Arafat would call on if he wanted to institute a cease-fire.

Differing sharply with Israel, the Bush administration insisted Tuesday that Arafat should remain in the West Bank and try to quell the still-raging violence.

“We think that Chairman Arafat still has a role to play,” Secretary of State Colin Powell said Tuesday on ABC’s “Good Morning America” program. “We need to work with him where he is, and where he is, is in Ramallah.”

In just one sign of the severity of the deadly violence, the State Department on Tuesday issued a travel warning urging Americans living in Jerusalem to leave the city and offering dependents of U.S. diplomats the opportunity to return to the United States.

Israeli tanks and helicopter gunships Tuesday shelled the headquarters of Jibril Rajoub, Arafat’s preventive security chief, who has been a key player in cease-fire negotiations with U.S. Middle East envoy Anthony Zinni.

Israeli spokesmen said Rajoub was harboring militants who were high on Israel’s most-wanted list. After a U.S.-mediated cease-fire at the complex in Baytuniya, outside Ramallah, half of the 400 people inside surrendered for questioning by Israeli forces.

While Rajoub, who fled the area, was not the target, Palestinians said the events would undercut, if not humiliate, him. There were reports of threats against him by the militant Islamic resistance group Hamas, apparently in response to the surrender.

Sharon’s strategy leaves unclear whom Israel will negotiate with on the Palestinian side once the anti-terrorism campaign, called “Operation Defensive Shield,” is complete.

“We clearly have a problem on our hands,” said Dore Gold, a top Sharon adviser. “Where we go from here, we will see once our military operations are finished.”

While “Israel has no interest in dismantling the Palestinian Authority,” Gold said, “There’s no question . . . that Yasser Arafat is part of the problem.”

Sharon, visiting Israeli troops at a base on the West Bank, suggested he would like to see Arafat sent into exile, an outcome the Bush administration opposes because of fears that it would only boost Arafat’s status as an international celebrity.

“It’s got to be a one-way ticket. He would not be able to return,” the Israeli prime minister told the soldiers. In addition, he said, Arafat would not be able to take anyone with him if he left his confinement in Ramallah, because there are “murderers” in his retinue.

Any decision on exile would have to be approved by Sharon’s Cabinet, where the Labor Party probably would oppose it.

Exile is “a highly academic issue” because Palestinians would never accept it, Foreign Minister Shimon Peres, of the Labor Party, told CNN.

Indeed, Arafat aides immediately rejected Sharon’s remarks.

“Arafat said there is not a single Palestinian who will accept going into exile under any circumstances,” said a top aide, Saeb Erekat.