Tel Aviv terror bomb jeopardises Israel-Gaza truce deal

An Israeli driver who witnessed the explosion told Army Radio the bus was "completely charred inside." Another witness said there were few passengers on the bus when it exploded.

Police spokesman Micky Rosenfeld said authorities were investigating whether the bomb had been planted and left on the bus or whether it was the work of a suicide bomber.

Witnesses told the BBC that they saw a man leave something on the bus near the nation's military headquarters.

^{Israeli rescue workers and paramedics carry a wounded person from the site of a bombing in Tel Aviv (AP)}

The attack happened on the eighth day of an Israeli offensive against the Gaza Strip which it launched with the stated aim of preventing rocket strikes from the Palestinian enclave.

Celebratory gunfire rang out in Gaza City when local radio stations reported news of the Tel Aviv explosion.

The last time Israel's commercial capital was hit by a serious bomb blast was in April 2006, when a Palestinian suicide bomber killed 11 people at a sandwich stand near the city's old central bus station. "There are about 10 people wounded of whom three are in serious condition," emergency services spokesman Zaki Heller told public radio.

"There was an apparent explosion on a bus in Shaul HaMelech Street in Tel Aviv. The background and circumstances are not clear yet," police spokesman Luba Samri told AFP.

^{Israeli rescue workers and paramedics carry a wounded person from the site of a bombing in Tel Aviv (AP)}

News of the explosion came as Hillary Clinton, the US secretary of state, is engaged in strenuous shuttle diplomacy to wring an elusive truce deal from Israel and Gaza's militant Hamas rulers, after earlier attempts to end more than a week of fighting broke down amid heavy overnight bombing.

Mrs Clinton joined other diplomats in shuttling between Jerusalem, the West Bank and Cairo, trying to piece together a deal after a week of fighting and mounting casualties.

After meeting Benjamin Netanyahu, the Israeli Prime Minister, in Jerusalem on Tuesday night, Mrs Clinton conferred with Palestinian President Mahmoud Abbas in the West Bank on Wednesday morning.

She then returned to Jerusalem for further talks with Mr Netanyahu, Ehud Barak, the defence minister and Avigdor Lieberman, the foreign minister.

She was due to travel to Cairo, carrying Israeli demands for further Egyptian assurances that the flow of arms to Hamas, the militant faction that controls Gaza, can be cut off.

Protesters angered by the eight-day Israel operation to bomb Gazan rocket arsenals gathered outside the Ramallah complex housing the Palestinian Authority as Mrs Clinton met Mahmoud Abbas, its president.

The US envoy arrived in Israel last night and met Benjamin Netanyahu, the Israeli prime minister who launched Operation Pillar of Defence last Wednesday. He said the US and Israel would take the opportunity to align their positions so that diplomacy could draw the conflict to a close.

"If there is a possibility of achieving a long-term solution to this problem with diplomatic means, we prefer that," he said. "But if not, I'm sure you understand that Israel will have to take whatever action is necessary to defend its people."

Sources in Gaza reported the death toll in Gaza had reached 139 by Wednesday morning.

Instead of an expected cessation, Israel’s military laid on a heavy bombardment of artillery and aerial bombing on Gaza after warning residents to move to designated “safe areas”.

In the hours of darkness, Israeli forces targeted dozens of “terrorist infrastructure sites”. More than 30 strikes overnight also included government ministries and a banker's empty villa.

At least four strikes within seconds of each other pulverised a complex of government ministries covering a city block, rattling nearby buildings and shattering surrounding windows. Hours later, clouds of acrid dust still hung over the area and smoke still rose from the rubble.

The list of targets destroyed in bombing runs included weapon depots, smuggling tunnels and rocket-launching bases.

A Hamas operations centre on the seventh floor of a high-rise building was hit. Offices in the building included media organisations, who were warned their status would afford them no protection as Israel sought high value targets.

“Warning to reporters in Gaza,” the army said in a message on Twitter. “Stay away from Hamas operatives & facilities. Hamas, a terrorist group, will use you as human shields.”

Three journalists were among the dead on Tuesday as Israel hit cars it believed contained Hamas figures.

Two worked for news outfits affiliated with Gaza's Hamas government and a third journalist worked for a private radio station was killed in a separate incident.

Two Israelis were also killed by rocket fire from Gaza, bringing to five the casualties in Israel.

Egypt's Islamist government is mediating talks and had floated hopes for a ceasefire by late Tuesday.

Hamas leaders in Cairo accused the Jewish state of failing to respond to proposals and said an announcement on holding fire would be pushed into Wednesday.

Officials suggested that no outcome would be sealed until Mrs Clinton met President Mohammad Morsi in Cairo this afternoon.