Under Fire, Rabin Rejects Tougher Steps : Israel: Opposition says his policies are so soft that they encouraged recent Palestinian attacks.

Despite widespread fears of rising terrorism, Prime Minister Yitzhak Rabin resisted demands from opposition parties Thursday for much tougher measures to deal with the surge of Palestinian attacks upon Israelis.

Sharply criticized for a series of attacks in which 15 Israelis were killed last month, Rabin said the closure of the occupied West Bank and Gaza Strip ordered last week will be continued--”I won’t say for how long,” he added--to permit further military and police sweeps there for armed gangs.

Rabin also said strict limits will be placed on Palestinians allowed to work within Israel in order to “separate” the two peoples. The initial measures, he asserted, have already improved security and restored a measure of calm for the Jewish Passover holiday.

Speaking at a raucous special session of the Knesset, Israel’s Parliament, Rabin reiterated his belief that only a political settlement of the Palestinian question could bring his country lasting security, and he declared that his government will pursue such negotiations despite the attacks.

“The reality is that between us and the Palestinians . . . there is a harsh confrontation, a confrontation that has been going on and on,” Rabin said. “And . . . the increase (in terrorism) is a result of that confrontation and the lack, so far, of a resolution at its roots.”

But Benjamin Netanyahu, the new chairman of the opposition Likud Party, charged that Rabin’s policies have proven so soft that they actually encouraged the recent attacks, and he demanded that the government either take a tougher line or step aside.

Netanyahu, reflecting the widespread demand for firmer government action, called for legislation making it easier to deport Palestinian political activists, to destroy the houses of suspected terrorists and to impose the death penalty for “cruel” acts of terrorism.

He also proposed changes in Israel’s gun laws so that army veterans, who include almost all Jewish men and two-thirds of Jewish women, can easily get permits for firearms.

In closing the territories, Rabin actually took a major step toward turning them into a Palestinian state, Netanyahu said, and that would be “a mortal threat” to Israel.

“We had no choice but to create this separation since it was impossible to know who was capable of a knifing and who wasn’t,” Rabin replied, defending the decision, as much criticized from the right as the left, to cordon off the occupied territories and their 2 million inhabitants. “Eight days is a short time, but already we are feeling a change in the atmosphere.”

Israel’s choice, Rabin said, was “whether to annex the 2 million or so Palestinians living in territories and turn them into residents of Israel against their wishes and against mine or to find a way of coexistence.”

In the southern Gaza Strip on Thursday, Israeli troops fatally wounded Raeda al Kara, 13, according to a military spokesman, when they opened fire on a group of schoolchildren throwing stones at them in the village of Bani Suheila. She was the first person killed in the strife-torn region in nine days.

Security forces also reported the arrests of 18 men from the West Bank suspected of belonging to the military wing of the Islamic Resistance Movement, Hamas, and carrying out a series of attacks in Israel over the last six months from their base in Nablus.