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BETHLEHEM, West Bank (AP) _ Israeli forces and armed Palestinians holed up inside the Church of the Nativity exchanged gunfire Monday, and the 3-week-old standoff at one of Christianity's holiest sites appeared far from resolution.

Stun grenades were heard around the church, and a puff of white smoke rose up from the compound. A Palestinian policeman inside the church, speaking on condition of anonymity, said Israeli fire was hitting the church walls.

Other policemen inside said they returned Israeli gunfire.

The Israeli army would not immediately comment on the situation.

Three weeks ago, armed Palestinians fleeing Israeli troops shot open the locks of a nearby Franciscan monastery, and broke into the church compound. Since then, Israeli tanks and snipers have surrounded the compound. The church stands on a grotto where Christians believe Jesus was born.

The Israeli army says the armed Palestinians number about 230 and include some militants wanted for killing Israeli civilians or soldiers. There are also 35 priests, monks and nuns and about 50 unarmed Palestinian civilians, some of them teen-agers.

On Monday, the Israeli army seized government-issued press cards from 17 foreign and Palestinian journalists covering the standoff.

The journalists were stopped about 400 yards from Manger Square and the church compound. An army officer told the journalists they were in a restricted area and insisted they turn over their press cards. The army did not produce any document backing up the claim that the area was restricted, as required by law.

The reporters and cameramen were from The Associated Press, Reuters, Agence France Presse, the British Broadcasting Corp., ABC, the ARD network of Germany, the Qatar-based Al Jazeera television station and a Spanish journalist.