At least seven people have been killed and around 50 injured in a suicide bombing near a crowded restaurant in the Israeli city of Tel Aviv.
The bomb exploded at The Mayor's Felafel restaurant, close to the central bus station in the crowded Neve Shaanan area on Monday afternoon.
Acting Israeli Prime Minister Ehud Olmert said Israel "would react in a necessary way," to the bombing.
Responsibility for the attack was claimed the Palestinian organisation, Islamic Jihad.
The bombing was the first attack in Israel by Palestinian groups since January and came hours before the swearing-in of the new Israeli parliament.
Palestinian groups had vowed to take revenge after recent Israeli military strikes in northern Gaza that left 18 Palestinians dead.
Shattered
It is the first suicide bombing since Islamist group Hamas formed a new government in the Palestinian territories over two weeks ago.
A witness, Moussa al-Zidat, said a security guard outside the restaurant asked the suspected bomber to open his bag.
"I saw a young man starting to open his bag. The guard begins opening the bag, and then I heard a boom."
Live footage on Israeli television showed bystanders with blood on their shirts and the wounded being treated by the side of the road.
Car windscreens were shattered by the blast which blew out the windows of nearby buildings.
Reaction
The Palestinian president, Mahmoud Abbas condemned the attack in a statement issued by his office.
"This attack violates the Palestinian national consensus and runs contrary to our interests," the statement said.
However, Khaled Abu Helal, a spokesman for the newly-elected Hamas government, said the attack was "a direct result of the policy of the occupation and the brutal aggression and siege committed against our people."
It is the second time the same restaurant has been hit this year.
Fifteen people were injured at the fast-food outlet on January 19 in a bomb attack claimed by Islamic Jihad.