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JERUSALEM, Aug. 10 (JTA) — One witness said the streets were filled with blood.

Jerusalem’s mayor said, “We are in a war.”

Those wounded by nails and shrapnel lay sprawled in the streets, bleeding as they waited for medical attention. Others sat in the street and cried.

A popular restaurant was a gutted ruin. A few moments earlier, according to Jerusalem police officials, a Palestinian man had wandered in with the lunchtime crowd and detonated a bomb.

Nearby, some young Israelis chanted, “Death to Arabs.” Some of them wore T-shirts that read, “No Arabs, No Attacks.”

A mother of four said she and her children had just recited a blessing over lunch when the blast sent glass flying everywhere.

Police on horseback cordoned off the area while bomb experts searched for more, as-yet undetonated explosives.

The one bomb that did go off Thursday killed at least 15 and wounded more than 130. With two victims in critical condition, however, and at least 15 others in very serious condition, officials cautioned that the total still was preliminary.

The attack created the highest death toll since a June 1 blast outside a Tel Aviv disco killed 21 Israelis and wounded more than 100.

The bombing took place at the Sbarro Restaurant on the corner of King George and Jaffa streets, one of downtown Jerusalem’s busiest intersections. Islamic Jihad claimed responsibility for the attack.

The attack occurred around 2 p.m., when the restaurant was filled with customers, many of them parents with children on summer vacation.

In response, Israeli police early last Friday raided Orient House, the Palestinians’ de facto headquarters in eastern Jerusalem, as well as nine Palestinian Authority buildings in Abu Dis, an Arab town just over the Jerusalem municipal line.

In addition, Israeli F-16 fighter jets destroyed a Palestinian police station in Ramallah, causing no injuries.

The State Department last Friday criticized the Israeli actions, calling them “a political escalation.”

Dozens of Palestinians and left-wing Israelis clashed with police outside Orient House, and P.A. officials threatened that the Palestinians would escalate their “resistance” against Israel.

An Israeli foreign policy advisor visiting Washington on Friday said the Israeli retaliation was “moderate” and not intended to escalate the situation. After meeting with U.S. Deputy Secretary of State Richard Armitage and National Security Advisor Condoleezza Rice, Danny Ayalon said Israel has to take measures of self-defense and wants to deny the Palestinians any political gains from terrorism.

“We gave Arafat all the information on the people involved in terror attacks, but he did not act against them and therefore we had to take action,” Ayalon said. He added that the actions against the Palestinian Authority were planned so as not cause casualties on the Palestinian side.

Ayalon also said that Palestinians are planning new attacks on Jerusalem and other Israeli cities and that Israel will defend itself with force.

“There’s a clear strategy for the Palestinians to escalate,” Ayalon said.

On Friday, the Palestinian Authority arrested two terrorist cells in the West Bank, Israeli television reported. One cell was connected to the suicide bombing in Jerusalem and the other was an Islamic Jihad cell on its way to carry out a terror attack.

The Palestinians notified the United States of the arrests in order to prevent an Israeli retaliation attack, the Israeli daily Ha’aretz reported.

No such P.A. determination was in evidence Thursday, however, when a young Palestinian entered the Jerusalem pizzeria with a large bomb packed with nails.

“I saw a mother sprawled on the floor wounded, and beside her was her dead daughter,” said Ya’acov Hasson, an ambulance driver.

“I saw so many babies in an awful state,” one Magen David Adom volunteer said. “I wanted so much to help save them all, but there was not enough time. I saw dead and wounded, an experience I’ll never forget.”

Thursday’s bombing brought statements of condemnation from around the world. One high-ranking Palestinian official said Israel brought the bombing on itself, and Palestinian Authority President Yasser Arafat’s Fatah Party praised the attack.

Under pressure from Washington, Arafat later issued a denunciation of the bombing.

As he did following the June disco bombing in Tel Aviv — when a massive Israeli retaliation appeared imminent — Arafat called on Israel to agree to a cease-fire. In a statement read by a broadcaster on Palestinian television, Arafat said the truce should begin Friday.

President Bush issued a statement condemning the bombing.

“My heartfelt sympathies and those of the American people are with the victims of this terrible tragedy and their families,” Bush said in a statement. “The deliberate murder of innocent civilians is abhorrent to all.”

Bush also urged the two sides “to return immediately to the cease-fire commitments they have previously made and to renew effective security cooperation so this kind of terrorism will not happen again.

A State Department official said the United States expects the Palestinian Authority to find those responsible for the attack.

A Palestinian official saw things differently, saying Prime Minister Ariel Sharon’s policies were to blame.

The Palestinian leadership holds “Sharon fully responsible for what happened,” P.A. Information Minister Yasser Abed Rabbo told Reuters shortly after the attack.

“The assassinations, the killings and terrorism that he practiced and escalated in recent weeks led to this result.”

Israeli officials reacted cooly to Arafat’s belated cease-fire call. Israel accepted a U.S.-brokered cease-fire following the attack on the Tel Aviv disco, but it was not immediately clear whether there would be another truce now.

Arafat is “attempting to prevent an Israeli response,” a senior Israeli official was quoted as saying. “If he really wanted a truce, he would stop the terrorists from the Hamas and Islamic Jihad.”

Even Foreign Minister Shimon Peres, among the most dovish members of the government, said Arafat could have prevented the bombing if he had acted more resolutely against Palestinian terror groups. The handler for the suicide bomber, Peres noted, was on a list of terror suspects that Israel had asked the Palestinian Authority to arrest, but the Palestinians disregarded the request.

Instead, Arafat has been considering inviting Hamas and Islamic Jihad into his government.

U.S. Secretary of State Colin Powell said he spoke with Arafat shortly after the bombing, adding that he was pleased the Palestinian leader condemned the attack.

“Now he has to find those responsible and bring them to justice,” Powell said. “And I hope that both sides will act with restraint.”

Powell added that he would be willing to “go anywhere it makes sense to go,” but said he believed a trip to the Middle East would be fruitless until Israel and the Palestinians reduced the violence.

“We’re trying to mobilize the international community to give that message once again — that the solution to the problem rests with the parties in the region.”

U.S. Jewish groups roundly condemned the attack.

The Jewish Council for Public Affairs encouraged U.S. Jews to urge Bush and the U.S. Congress to impose sanctions on the Palestinian Authority.

“It is not enough to express outrage and offer condolences,” JCPA Chairman Leonard Cole said. “The Palestinian Authority and its Chairman Yasser Arafat must be held accountable.”

Also on Thursday, two Israelis were killed in separate attacks in the West Bank.

In the first, Palestinian gunmen killed an Israeli soldier near the city of Tulkarm. Israel shelled Palestinian police positions in the area after the slaying.

In another attack, Palestinian gunmen killed a 17-year-old Israeli woman in a drive-by shooting at the entrance to Kibbutz Merav.

Three other Israelis were wounded, one of them seriously.

Thursday’s bombing came as Israeli security forces were on high alert for possible terror attacks. Jerusalem Mayor Ehud Olmert said there had been warnings of an imminent attack in the capital.

“We tried to do everything to prevent it. Unfortunately, this time we were not successful,” Olmert told reporters near the site of the attack.

He also appealed to residents to act with restraint.

“I fully understand the pain and concern and fear of many people,” but “we are strong,” Olmert said. “Nothing will break us.”

Hours before the blast, Peres said Sharon’s refusal to negotiate with the Palestinian Authority while violence continues puts the region’s future in the hands of extremists.

“If we say we won’t talk under fire, it means that every gunman can decide there will be no dialogue,” Peres said.

(JTA correspondent Matthew E. Berger in Washington contributed to this report.)

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