Secret police claim to have broken up a Palestinian terrorist cell based in Israel on the day that another terrorist group suspended attacks on Israelis.
Local radio reports the Islamic Jihad cell comprised eight people with Israeli identity cards and its own bomb-making laboratory.
It was discovered after a inquiry by the Israeli internal security service, Shin Beth, and the police.
Jihad is an extreme Islamic militant group opposed to the state of Israel and has carried out numerous suicide bombings. It claimed the attack on Sunday which wounded at least 26 Israelis in the coastal resort of Netanya.
Israeli Prime Minister Ariel Sharon warned recently a security fence being built close to the Green Line separating the West Bank from Israel could encourage Palestinian militants to seek support among Israel's Arab community, including making bombs inside Israel.
A spokesman for a second Palestinian militia, the Al Aqsa Martyrs' Brigade linked to Yasser Arafat's Fatah movement, today said the group was halting all attacks on Israelis for the duration of the Iraq war.
The militia fears harsher Israeli reprisal to such attacks at a time when the world's attention is focused on Iraq, the spokesman said.
AFP & AP