By Mark Heinrich

JENIN REFUGEE CAMP, West Bank (Reuters) - Israeli soldiers searched for boobytraps amid decaying bodies and smashed houses in the Jenin refugee camp on Sunday, the scene of the fiercest fighting in Israel's offensive in the West Bank.

The Israeli army again denied Palestinian allegations that its soldiers had carried out a massacre in the camp when they battled Palestinian gunmen and suicide bombers during an invasion Israel said was aimed at uprooting "terrorists."

Israeli Defense Minister Binyamin Ben-Eliezer told the cabinet in a closed session on Sunday that around 70 militants had been killed in the camp, fewer than earlier army estimates, political sources said.

A Reuters news team, which slipped past Israeli tanks on Saturday, saw several bodies lying decaying in the camp, where the last die-hard Palestinian fighters either were killed or surrendered on Thursday.

Israel's Supreme Court rejected an appeal by an Arab-Israeli human rights organization to ban the army from collecting bodies in the camp. The group filed the petition following Palestinian allegations the army was secretly burying corpses in mass graves.

The court said officials of the International Committee of the Red Cross officials should be involved in the army's removal and identification of bodies.

The court said the Israeli army would be entitled to bury the bodies if Palestinian authorities failed to do so.

HUNT FOR BOOBY TRAPS

Israeli commanders in Jenin said they had not yet begun burying bodies. "We have to finish sweeping the area and deal with booby-trapped houses and ammunition depots," said Colonel Eyal Shlein.

"They made use of every opportunity, whether a child or a body or a woman, to lay a bomb or booby-trap bodies to try to cause as many casualties as possible."

Rocket fragments, bullet casings and glass shards speckled twisting lanes and the living rooms, kitchens and bathrooms of homes seen in a tour of the refugee quarter, where only a few hundred of an original 13,000 residents remain.

The Reuters team on Saturday found the contorted bodies of four Palestinian men, blackened by decomposition, in the ruins of one living room that had apparently been hit by a missile.

Andeera Harb, 34, a child psychologist whose relatives owned the house, said the four men had been eating dinner when a missile plowed through the upper wall.

However, there was a helmet on the head of one body. What appeared to be petrol bombs, apparently intended for Israeli troops advancing through the alleyways, were partially hidden under a coat near the front door.

In a room of a house 100 yards away, the bloated body of a middle-aged man lay on its side next to a bookcase.

MEN ARRESTED

Residents said the army had arrested most of the men in the camp and told those remaining, over loudspeakers, to leave unless they wanted to end up in the rubble of their own homes.

The army said residents had either left voluntarily or been forced out by militants who wanted to booby-trap their homes.

The Israeli army has said at least 200 Palestinians have been killed in the West Bank offensive, launched on March 29 after a wave of suicide bombings killed scores of Israelis.

Twenty-three Israeli soldiers were killed in Jenin. Military officials said the army had sustained heavy casualties because it sent ground troops in rather than use air strikes to attack gunmen who had been penned into a small area of the camp.

Soldiers fought vicious house-to-house battles with gunmen who laid booby traps, staged lightning ambushes and used suicide bombers who, Israeli commanders said, included youngsters.

On Sunday the camp perimeter was still being watched around the clock by soldiers in tanks and armored combat vehicles to keep outsiders away. Jenin is under a general military curfew which is periodically lifted for a couple of hours to allow residents to stock up on essentials.

Residents said the army was refusing to let in medical services to dispose of the dead or tend to the ill and wounded.

They said more bodies lay in the wreckage in the central square, and some said they had seen bodies and rubble loaded together into Israeli trucks and driven off.

None of the allegations, which the army has denied, could be independently confirmed. The army said it was letting in trucks carrying medical assistance.