Filed at 12:08 p.m. ET

JABALYA REFUGEE CAMP, Gaza Strip (Reuters) - Thousands of Palestinians including would-be suicide bombers rallied on Friday to protest at new U.S. legislation lending support to Israel's contested claim to Jerusalem as its capital.

Activists from the Islamic militant group Hamas said the bill signed by President Bush signaled ``further American support for the Zionist enemy'' and vowed to step up attacks in a two-year-old Palestinian uprising against Israel.

At least 3,000 Hamas supporters led by the movement's spiritual leader and founder, Sheikh Ahmed Yassin, marched in the Gaza Strip's Jabalya refugee camp after Friday prayers.

At least 400 masked Islamic militants, some dressed in white clothes bearing the words ``martyr-in-waiting,'' burned Israeli and U.S. flags.

Another 2,000 Palestinians rallied in Gaza City, chanting that Bush was ``a coward'' and ``Jerusalem will not be taken away.''

Several hundred marched in the West Bank city of Nablus in defiance of an Israeli military curfew, crying out: ``America is the head of the snake.''

The bill passed by the U.S. Congress requires the U.S. government to list Jerusalem, holy to Jews, Muslims and Christians alike, as the Israeli capital in official documents.

This flew in the face of Palestinians' claim to East Jerusalem, which contains the walled Old City with Islamic, Jewish and Christian shrines, as the capital of a state for which they are waging an uprising in the West Bank and Gaza.

After Bush signed the legislation, the White House stressed the measure did not change its policy that Israelis and Palestinians must negotiate a solution to the status of Jerusalem as part of any final peace agreement.

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Bush administration officials also argued that the bill amounted merely to non-binding recommendations and said the U.S. consulate in Jerusalem, which handles Palestinian affairs, would continue to report directly to Washington, not to the U.S. ambassador to Israel who is based in Tel Aviv.

Palestinians were not reassured by such qualifications, given strong U.S. support for Israeli Prime Minister Ariel Sharon who has taken harsh military action to quell their uprising, and Washington's ostracism of Palestinian leader Yasser Arafat.

``This decision is a silly decision because whoever adopted it does not own anything (here). Jerusalem belongs to the Muslim and Arab nation,'' said Sheikh Yassin, whose group seeks the elimination of Israel.

``Jerusalem will remain Islamic whether Israel and the United States like it or not,'' he told Reuters in Jabalya.

Israel captured East Jerusalem in the 1967 Middle East war and annexed it in a move not recognized internationally.

Islamic militants in Jabalya made graphic threats of more suicide bombings over the Jerusalem dispute.

``We are sending a message to the Israeli people. Get out of our land or your bodies will be cut into pieces around hotels and in markets (in Israel),'' they cried through loudspeakers.

Hamas has been at the forefront of suicide bombings and ambush shootings that have characterized the uprising.

The rallies were called by a committee of 13 Palestinian factions steering the uprising. Further protests at Palestinian Christian churches are expected on Sunday.