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WASHINGTON (AP) _ The State Department stepped up its criticism of Israel on Monday, saying it was ``deeply troubled'' by raids on Palestinian-held areas that killed civilians.

As usual, the criticism was couched in an affirmation of Israel's right to defend itself, but in ways that do not harm civilians.

The Israeli army said most of the victims in a raid in Gaza were armed men. But State Department spokesman Richard Boucher said many civilians were victims.

He said there were civilian casualties in other Israeli raids, as well, and ``we are deeply troubled.''

Recently, the Bush administration criticized Israel for laying siege to Yasser Arafat's compound on the West Bank and for trying to assassinate a leading Palestinian bombmaker in an attack that killed civilians.

Israeli Prime Minister Ariel Sharon is due to meet with President Bush at the White House next week.

The administration long has criticized Israel's counter-terror tactics, but as the administration moves toward war with Iraq, an Arab state, it is especially sensitive to Israel's military moves against the Palestinians.

Secretary of State Colin Powell met, meanwhile, with Salam Fayad, the Palestinian finance minister who Boucher described as playing a role in reform efforts.

He said they talked about U.S. assistance to the Palestinians, but that no decision was imminent.

Fayad is due to meet with Condoleezza Rice, Bush's assistant for national security, on Tuesday.

Bush in June called for an end to corruption within the Palestinian Authority and said there also must be moves toward democracy before he would try to establish a Palestinian state.

He also called for Arafat's ouster, but that demand has been played down by the White House and State Department since.