At least four people, including a suspected suicide bomber, have been killed in an explosion at a shopping centre in the northern Israeli city of Afula.
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Another 15 people were also hurt in the blast, the which followed a series of suicide attacks that have dimmed hopes that a new US-backed peace plan will end more than 31 months of Israeli-Palestinian bloodshed.
Israeli radio stations said police suspected the blast was a suicide attack carried out by a woman.
Israel earlier sealed off Palestinian areas after a wave of suicide attacks in Jerusalem and Hebron over the weekend killed 12 people. Israel radio said the move meant barring Palestinians from working in Israel.
The hardline Islamic movement Hamas claimed responsibility for the three bombings. "We will burn the earth beneath the feet of the Zionist occupiers," Hamas's armed wing, the Ezzedine al-Qassam Brigades, vowed in a statement promising more attacks.
This morning, three Israeli soldiers were injured when a Palestinian suicide bomber riding a bike detonated his explosives as he passed them in the Gaza Strip.
Israeli Prime Minister Ariel Sharon put off plans to visit the United States to discuss the Middle East peace plan after yesterday's attack.
The Israeli government blamed Palestinian President Yasser Arafat for the attacks but repeated its commitment to talks with new reform-minded Prime Minister Mahmoud Abbas.
Israel and the United States want to isolate Mr Arafat and are looking to Mr Abbas, who has said he wants to curb violence. He met Mr Sharon on Saturday night for the highest-level Israeli-Palestinian talks in more than two years.
Summoning his Cabinet into special session yesterday evening, Mr Sharon faced calls from several ministers to expel Mr Arafat.
Calls for Mr Arafat's deportation routinely follow attacks in Israel, but Mr Sharon has resisted. And yesterday, he again said this was not the time to expel Mr Arafat, his personal enemy for decades.
According to a senior Israeli government official, Mr Sharon said that deporting Mr Arafat would create a worse situation for Israel than the present one, with Mr Arafat travelling from capital to capital stating his case.
Instead, Israel took a much lesser measure, aiming to increase his isolation. The official said foreign diplomats would be told that if they declare their intention to meet Mr Arafat, they will be banned from seeing Israeli officials.
In other violence, the army shot dead a 13-year-old during clashes in Beit Hanoun in northern Gaza. Witnesses said he was in a crowd throwing stones at soldiers. Israeli military sources said troops fired only after they were shot at.
UN agencies and other groups have protested against the restrictions imposed by the Israeli army on foreigners wishing to enter the Gaza Strip.
"We seek a prompt return to procedures that will allow UN international staff members and other humanitarian aid and development workers to exit and enter Gaza freely, with minimal delays," the 18 organisations said in a joint release.
Among the signatories of the petition were the UN Relief and Works Agency, the World Food Programme, the World Health Organisation, Medecins Sans Frontieres, Medecins du Monde and Oxfam.
Mr Sharon had been due to meet President George W. Bush tomorrow to discuss the "road map" peace plan drawn up by the United States, the European Union, Russia and the United Nations. He had been expected to express his reservations.
The plan stipulates confidence-building steps to bring about Palestinian statehood in the West Bank and Gaza by 2005. Mr Abbas's government has endorsed the road map but Mr Sharon's has not, citing mainly security concerns.
Agencies