Jamal,
you are still adding the map service layer, not as a feature layer (pls note that in my last screen shot, the URL ends with '/0')
You need to add the sublayer off your map service to a map first.
Step#1:
Pls note the 'Cities' underneath the 'SampleWorldCities' is selected in my screenshot below. SampleWorldCities is the map service, whereas Cities is a sublayer (of feature layer type). You need to add Cities not SampleWorldCities (in my example). In your case you need to right-click on 'Communities_Ramallah_FC' (NOT Area_ABC_PalGrid1923) and select 'Add to Current Map'
once you add this, the TOC will look like this. Note, there is no parent layer for Cities.
at this point, it works like any feature layer that you can add from a FGDB or Enterprise database (aka SDE). You can set def query, you can change its symbology/renderer etc.
Step#2:
Open Feature Class to Feature Class gp tool
Step#3:
now you can drag/drop the layer (from the TOC/Content pane, NOT from the Catalog pane) to the gp tool, OR
just select the layer from the GP tool Input Features drop down.
please give this a try and let me know if you run into any issue.