Secretary of State Colin L. Powell rebuked Israel on Sunday for its policy of destroying Palestinian homes, which he said was counterproductive to U.S. efforts to generate new movement on a stalled plan for Middle East peace.

On the day that Israel's Supreme Court rejected a Palestinian appeal to stop the destruction, Powell used unusually blunt language to convey that the Bush administration wanted the government of Prime Minister Ariel Sharon to halt the practice. Israel's long-standing policy of demolishing Palestinian homes, generally as a punitive measure or for security reasons, has come under scrutiny because of the destruction of dozens of homes this past week in the Rafah refugee camp in the Gaza Strip, along the border with Egypt.

"We oppose the destruction of homes. We don't think that is productive," Powell said in Jordan during a whirlwind 24-hour visit there for a World Economic Forum meeting. "We know that Israel has a right for self-defense, but the kind of actions that they are taking in Rafah, the destruction of Palestinian homes, we oppose."

"The United States is anxious to do everything that it can to stop this cycle of strike and counterstrike that has resulted in the loss of so many lives within the last week," he said at a news conference at a Dead Sea resort.

A senior U.S. official traveling with Powell, speaking on condition of anonymity, said thousands of people had been affected by the Rafah demolitions, an action he said was only nominally for security reasons. Israeli officials had called on the Palestinians to destroy tunnels under Rafah that they say have been used to smuggle weapons. When the Palestinians proved unable or unwilling to act, the Israelis began the demolitions.

Powell later told reporters traveling with him that he questioned whether the destruction would make Israel more secure.

Powell said a large demonstration Saturday in Tel Aviv indicated a "groundswell of support" for Sharon's plan to withdraw settlers and troops from Gaza. The plan, which called for closing 21 Jewish settlements in Gaza and four in the West Bank, was rejected by Sharon's Likud Party on May 2. Sharon has said he would revise it within weeks.

Powell also had harsh words for the Palestinians and Arab leaders. He said they urgently needed to begin preparing for the handover of the Gaza Strip under Sharon's terms, which the United States formally accepted last month as a means of jump-starting the peace plan, unveiled by President Bush last year and known as the "road map."

"What I've been saying to Arab leaders and to the Palestinians is that while you are unhappy and dissatisfied with certain aspects of this plan, look at the opportunity it presents -- the actual removal of settlements," Powell told reporters traveling with him to Ireland for a refueling stop before returning to the United States. "And while you are expressing your annoyance and dissatisfaction, you also need to get ready for the reality that may be upon you, being able to take over and administer entirely the Gaza Strip and be prepared to put to beneficial use the 21 settlements that will come into your hands."

Jordan's King Abdullah, left, walks with Secretary of State Colin L. Powell at the World Economic Forum. Powell, during a 24-hour visit, called Israeli actions in the Gaza Strip contrary to peace efforts.