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JENIN, West Bank -- A militant brazenly challenged the new Palestinian security chief Tuesday, firing his weapon outside police headquarters in this West Bank town as the commander was holding meetings in the building. The chief ordered the gunman's arrest, but quickly backed down and let him walk away.

The confrontation between Interior Minister Nasser Yousef and Zakariye Zubeydi, a militant who is seen by residents as the ruler of Jenin, illustrated the delicate balance the Palestinian Authority must strike between reining in armed groups through persuasion and fending off international calls for a crackdown.

Yousef, a tough ex-general who oversaw a crackdown on militants in 1996, took office last week in a Cabinet reshuffle. He is Palestinian leader Mahmoud Abbas' personal choice for security chief and has been touring West Bank towns to take stock of what is left of the security forces.

In more than four years of fighting, Israel has repeatedly targeted police installations, arguing that police were often involved in violence, prompting officers to go into hiding and leaving the streets to gunmen.

In Jenin, Zubeydi rose to prominence as the local leader of the Al Aqsa Martyrs' Brigades, a violent group with ties to Abbas' ruling Fatah movement. Zubeydi is both feared and admired by residents.

On Tuesday, Yousef drove into the adjacent Jenin refugee camp in a motorcade of several cars filled with bodyguards. During the tour, armed militants walked around the camp, but there was no contact between them and the security chief.

After Yousef reached Jenin's police headquarters, Zubeydi and seven of his followers marched into the compound, and three of the men began shooting in the air, an incident witnessed by several journalists.

Several policemen tried to stop the shooting and asked the gunmen to leave. One policeman tried to wrest the gun away from one of Zubeydi's followers. One militant, in turn, pointed his M-16 rifle at one of the soldiers. At that point, Zubeydi ordered the men to stop firing and they left.

Zubeydi said he was upset that Yousef had not coordinated the meeting with him and demanded the security chief leave. "Every city has its own gate, and Nasser Yousef did not come through the proper gate of Jenin," Zubeydi said.

An outraged Yousef responded by firing the local security chief, Fayez Arafat, bringing 600 police officers to the headquarters as reinforcements, and demanding Zubeydi's arrest.

"We are not leaving Jenin before we have arrested this bunch of criminals," Yousef said, according to witnesses who spoke on condition of anonymity for fear of reprisal.

Yousef quickly backed down, however, and met with Zubeydi, who returned to the building armed with a rifle and wearing a bulletproof vest. Zubeydi walked away a free man, and Yousef refused to comment on his reversal.

Controlling the militants, who are a powerful force in Palestinian life, is one of the thorniest problems for Abbas as he works to reform and consolidate his weakened security forces and end chaos in the West Bank and Gaza Strip.

On Tuesday, Abbas told an international conference on Palestinian reforms in London that he was committed to restoring order to Palestinian towns. "The most important message is our readiness, our full readiness to work for the internal security," he said.

Since taking office in January, Abbas has deployed forces throughout Gaza to prevent militants from firing rockets at Israeli targets and negotiated with militant groups for a temporary halt to all attacks on Israel.

But the limits to which Abbas -- and even the leaders of the militant groups -- can control the attackers were exposed Friday when, despite the truce, a suicide bomber blew himself up outside a Tel Aviv nightclub, killing five Israelis.

Islamic Jihad leaders claimed responsibility for the bombing, but blamed the attack on a local rogue cell working on orders from the Lebanese guerrilla group Hezbollah. On Tuesday, Israel also linked Islamic Jihad to a failed attempt to blow up a car with a half ton of explosives, the largest bomb assembled by militants in more than four years of fighting.

Some say the Palestinian security forces do not have the strength to take on the militants, who are heavily armed and seen as heroes by many Palestinians.

"The Palestinian Authority has no ability to enforce the law and to control the streets," Cabinet Minister Hassan Abu Libdeh said. "It needs rebuilding. It needs retraining."

He said Palestinian officials also were concerned that if they targeted militants wanted by Israel, they would be seen as collaborators. Instead, they prefer to absorb them into the security services.

During the presidential election in January, Zubeydi ignored the ban on weapons at polling stations and walked into a school to vote, surrounded by 15 armed supporters. However, he also called on his followers to vote for Abbas.

Continuing violence and a weak Palestinian security force has created worry among diplomats, who fear the militants will fill any power vacuum left by Israel's planned withdrawal from the Gaza Strip four West Bank settlements this summer.

Abbas has chosen to tread gingerly in dealing with the militants, dismissing Israel's call for a crackdown on the groups as a step toward civil war.

On Tuesday, Israeli Foreign Minister Silvan Shalom again demanded that Abbas crush the militant groups. "As long as they do not take the strategic decision to dismantle the terrorist infrastructure, we cannot make real progress toward peace," he said.