ERUSALEM, Dec. 30 . Israel's Supreme Court ruled today that reserve soldiers do not have a right to refuse to serve in the occupied territories. It held that Israeli society was too polarized and embattled to permit selective assertions of conscience by its fighters.

In a decision that tried to balance Israel's democratic values and its social and security needs, the court called this a "time of division" and warned that "the recognition of selective conscientious objection might loosen the links that hold us together as a people."

The ruling was a setback to a group of combat soldiers and officers who, while saying they would serve elsewhere, refuse to serve in the West Bank or Gaza Strip because they say their duties there involve "dominating, expelling, starving and humiliating an entire people."

The fortunes of their campaign, called "Courage to Refuse," reflect the hardening of Israeli public opinion under the threat of Palestinian suicide bombings. The campaign, which began early this year, has drawn 512 members, but its leaders acknowledge that it has failed to gain much political traction nationally for its claim that the occupation is corrupting Israeli society.

Feeling that they are in constant danger, Israelis have broadly supported the army's offensives and its tactics, from imposing 24-hour curfews on Palestinian cities to tracking and killing wanted Palestinians.

But beneath that broad agreement, the court found enduring fissures in Israeli society that is said it would render a selective refusal to serve dangerous to the state.

The reservists' group was seeking a right accorded those who object on moral grounds to performing any military service: to appear before a committee with the power to grant a conscientious objector an exemption from service. But the court found a distinction between refusing any service, and refusing only specific duties.

While the objection today might be to service in the occupied territories, the court said, "tomorrow the objection will be against the evacuation of various settlements in the area."

It warned: "The people's army might turn into an army of peoples, made up of different units each having its own spheres in which it can act conscientiously, and others in which it cannot. In a polarized society such as ours, this consideration weighs heavily."

The lawyer for the reservists' group, Michael Sfard, said that, as a democracy, Israel should be willing to endure a bit more difficulty in administering its military. "We pay a lot of prices for the values democracy represents," he said.

He said he would feel sympathy for an extremely religious soldier who, regarding the West Bank as deeded by God to the Jewish people, might object to an order to evacuate a settlement.

In violence in the territories today, Israelis soldiers killed three Palestinians. Near the city of Jenin, a Palestinian man was shot dead after his car collided with an army jeep. The army said that soldiers opened fire after the man emerged from his vehicle carrying a suspicious object. Soldiers found no weapon at the scene.

Palestinians described the man as a 37-year-old school teacher who was carrying groceries in his car, a small Peugeot.

In Nablus, Israeli soldiers shot and killed a Palestinian man who was preparing to throw a Molotov cocktail at them, soldiers and Palestinians said. Just outside the Gaza Strip, a Palestinian was shot dead as he attempted to infiltrate a kibbutz, the army said. The army said he was armed with a Kalashnikov rifle and grenades.

Mr. Sfard, himself a veteran of the war in Lebanon who has refused to serve in the territories, said that he and his comrades were pleased that the court had recognized they were motivated by what it called "real conscientious reasons" and not by politics, as some critics have said.

After performing three years of compulsory service, Israeli men under 45 then serve in the reserves for about a month each year. Since the conflict began 27 months ago, many have had to do duty guarding checkpoints and settlements in the West Bank and Gaza, or fighting inside Palestinian cities.

Today's ruling means that those who refuse to serve will continue to be vulnerable to up to 35 days of prison time each time they reject a reserve call-up. For that reason, about 200 reserve soldiers have served terms of 28 to 35 days in the last 18 months, Mr. Sfard said. Some, called up more than once, have already served more than one term.

After the decision was announced, Lt. David Zonshein, a founder of the group, was returned to Military Prison No. 6 to serve 18 days remaining on a sentence for refusing a call-up. He told Israel radio that, compared to his fighting in Lebanon and the territories, his tour in prison was "the most significant reserve duty ever." He said it might alert the public to "what is causing the state to send its best soldiers to prison."

He said that the court erred in not recognizing the particular dangers to Israel of service in the West Bank and Gaza. "The situation is that our small Zionist state is abandoning all its moral force when it goes to the occupied territories, and is fighting against itself," he said.

Israel seized the West Bank from Jordan and the Gaza Strip from Egypt during the Six-Day War in 1967.

The court did not rule on a separate claim by the group, that the occupation itself was illegal. The group decided to downplay that claim after the justices indicated during oral arguments that they were more interested in resolving the issue of freedom of conscience.

Mr. Sfard said that the group might eventually mount a second case based on the claim that the occupation was illegal.

In a concurring opinion today, Justice Dorit Beinisch wrote that "the considerations of state security and the integrity of Israeli society must be considered against the arguments of conscience and belief, however sincere."

She continued: "The questions raised by the fight against terrorism are at the crux of an intense political debate. Were this debate to be conducted within the army, it might result in serious and substantial harm."