JERUSALEM, June 19 (JTA) Just 36 hours after a bus bombing in southern Jerusalem that killed 19 Israelis and before another bombing in the northern part of the city killed at least seven Israeli soldiers were digging in around the Palestinian city of Jenin. It was obvious they were planning a long stay. The mobile homes, water pipes and electricity lines the soldiers brought with them were harbingers of a radical new policy. In recent weeks, the Israel Defense Force has moved rapidly in and out of Palestinian cities and villages on the basis of pinpoint intelligence. Following Tuesday’s bus bombing, however, the government announced that the IDF will take over large swathes of Palestinian-ruled territory, for relatively long periods of time, in a renewed effort to stop Palestinian terrorism. The move came as President Bush was putting the finishing touches on a major speech on Middle East policy that was expected to spell out the American vision of a “provisional” Palestinian state whose borders would be defined later. In addition, Bush was expected to send Secretary of State Colin Powell to the region to try to gather momentum toward an international peace conference some time this summer. The key question is how Israel’s new policy will affect any prospects for peace. If Israel indeed seizes Palestinian land, how will that mesh with Bush’s anticipated support for a Palestinian state in those areas? So far, the Americans are showing considerable understanding for the Israeli move. Even before Tuesday’s attack was followed by another bombing Wednesday at a hitchhiking post, the White House had put out a strong statement condemning the outrages and supporting Israel’s right to defend itself. At the same time, however, the Bush administration gently urged Israel “to remember to take into account the consequences of its actions, and keep open the path to peace, the political path.” That, in a nutshell, is the dilemma Israel faces: How to defend its citizens, while retaining international support and not closing the door to peace? Though Israel has American backing for now, its new policy of holding Palestinian-ruled areas for long periods may soon put it back in the international doghouse. The idea of seizing land first was mooted several weeks ago by Shin Bet Chief Avi Dichter, who argued that the Palestinian Authority was not doing anything to fight terror in the areas under its control. The West Bank is divided into three areas called A, B and C, with Israel responsible for security in areas B and C . The Palestinians nominally are responsible in A, which is made up of all the Palestinian cities and their immediate surroundings, and includes some 97 percent of the Palestinian population. According to the Oslo accords, Israeli forces can move freely in B and C, but are not supposed to enter Area A except in hot pursuit of suspected terrorists. Dichter, however, maintains that since the Palestinians are doing nothing about terror attacks, including suicide bombings, emanating from Area A, Israel must take charge there to protect Israeli lives. Israel this week began work on a security fence along its former border with the West Bank. Yet until the fence is built, Dichter told the government, the only effective way to fight terror is to combat it at its source in Area A. Dichter’s plan is not meant to replace the fence but to complement it, especially during the scheduled yearlong construction process. Once the fence is in place, Dichter says, the army won’t have to stay in Area A any longer. The government initially rejected the Dichter plan, but the new wave of suicide bombings and the imperative of saving Israeli lives overcame earlier reservations. Some may have hoped, too, that the policy would have a deterrent effect, showing Palestinians that each new terror attack would cost them control of additional land. Cabinet ministers had been concerned about world reaction, with Israel expected to be accused of subverting peace prospects if it reoccupies some Palestinian-ruled areas. They also were worried that Israel might be sucked into a creeping reoccupation of the entire West Bank and Gaza Strip, which would entail responsibility for civilian life for three million Palestinians. This the government wants to avoid at all costs. Former military governors of the West Bank shudder at the thought of dealing with everyday Palestinian life from food supplies to health, education and welfare, to town planning and housing permits. “This was bad enough in 1967 when there were only 800,000 Palestinians to care for,” says the first Israeli governor of the West Bank, Gen. Shlomo Gazit. Defense Minister Benjamin Ben-Eliezer is adamant that Israel has absolutely no intention of falling into the reoccupation trap. “Holding Palestinian areas,” he says, “is meant only to defend Israeli citizens, not to reoccupy the territories as a whole.” Only the most hawkish members of the Cabinet, like National Religious Party leader Efraim Eitam, favor total reoccupation. But that was not what the Cabinet voted for. The idea rather is to hold different parts of Area A at different times, without taking on civil functions. Yet even this is a radical departure from previous Israeli policy and, significantly, it was supported by Labor Party members of the Cabinet, including party leader Ben-Eliezer. However, legislator Haim Ramon, who intends to challenge Ben -Eliezer for the Labor leadership in October, already is calling the move a mistake. Israel, he says, should be seeking separation from the Palestinians, not closer contact. His criticism is sure to be echoed by left-wing opposition lawmakers. The Palestinians already are talking about launching an international campaign against any Israeli move into A areas. Chief Palestinian negotiator Saeb Erekat says they intend to complain to the U.N. Security Council.