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'
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once you add this, the TOC will look like this. Note, there is no parent layer for Cities.
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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.
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please give this a try and let me know if you run into any issue.