20 dead in massive Jerusalem bus blast

Israeli officials said they were suspending all contacts with the Palestinians after the evening blast, which left several children among the dead and about 40 youngsters among the wounded.

The blast devastated a bus packed with Israelis returning home from work and worshippers from the famed Wailing Wall in the deadliest Palestinian attack in more than seven months.

It also drove a final nail into a fragile seven-week-old ceasefire declared by the militants and drove tensions to a new peak just as Israel was set to pull back from two more Palestinian towns on the West Bank.

Police said 20 passengers and the bomber were killed in the blast that went off shortly after 9.00 pm (2.00 am Wednesday Brunei Time) in an ultra-Orthodox Jewish neighbourhood. Several children were among them, including an 18-month-old baby.

Mazal Zaken, 62, who lives in a house opposite from the explosion, said she was rocked by the blast that tore a hole in the roof of the bus, blew out its windows and hurled a chunk of the vehicle into her yard.

"I started screaming and went outside and saw people running in all directions covered in blood," Zaken said. "I will never forget it."

Pinchas Krainer, 57, was attending a Bar Mitzvah for his nephew in a nearby municipal hall when he heard the blast and saw children who had been playing outside run back inside in panic.

"They told us they saw bodies flying. I ran outside and was gripped by the smell of charred flesh," he told AFP.

Israeli authorities said 120 people were taken to hospital, including 14 in serious condition, after the bombing which damaged a tourist bus in front of the stricken vehicle and a car behind it.

Police said the suicide bomber was carrying a "large" explosive device when he mounted the bus. They were investigating reports he may have been dressed as an ultra-Orthodox Jew.

It was the bloodiest assault since two suicide bombs killed 23 people in Tel Aviv on January 5. The smoke had barely settled when the political tremors started rumbling in.

Israel had been set to hand over control of the West Bank towns of Jericho and Qalqilya to the Palestinians, but suspended the move and imposed a strict cordon around all Palestinian territories after the blast, its army radio said.

Gideon Meir, deputy director general of the foreign ministry, said that Prime Minister Ariel Sharon had also decided to break off the dialogue with the Palestinians.

"Based on the horrifying terror attack tonight and that the Palestinians did nothing whatsoever (against the militants), Prime Minister Sharon has decided to suspend all contacts with the Palestinians for the time being," he said.

The bombing occurred five days after Islamic Jihad vowed to avenge the killing of one of its local commanders in the southern West Bank city of Hebron. Hamas named the bomber as a 25-year-old teacher from the southern West Bank town.

The White House led international condemnation of the attack, describing it as a "vicious act" and calling on the Palestinian Authority to step up efforts to dismantle violent militant groups.