JERUSALEM, May 8 (JTA) — For a few brief days, it appeared there might be room for a diplomatic opening to end the Israeli-Palestinian conflict. Now, however, diplomacy may again take a back seat to terrorism and counterterror operations. In the first major Palestinian terror attack since Israel ended Operation Protective Wall in the West Bank, a bomber killed at least 15 people and wounded more than 60 when he blew up a pool hall in the Tel Aviv suburb of Rishon le-Zion on Tuesday night. "I was standing at a traffic light, and I saw the building fly up in front of my eyes," said Hanit Azulai, who witnessed the bombing. "There was a tremendous blast that I can´t describe. An entire floor flew up in the air. I thought it was a dream." Another witness, Roni Hakak, said he was outside the pool hall with friends when the attack occurred. "We were debating whether to go inside or go to another place when we saw the explosion. People flew out of the windows. It was a huge blast, a very large flame of fire," Hakak said. "We saw people lying on cars that were parked outside," he said. "These were people who fell out of the windows." Twelve of the victims were identified by Wednesday: Pnina Hikri, 60, of Tel Aviv; Sharuk Rassan, 42, of Holon; Shoshana Magmari, 51, of Tel Aviv; Anat Tremporush, 36, of Ashdod; Haim Rafael, 64, of Tel Aviv; Dalia Masa, 56, of Nahalat Yehuda; Nir Lovton, 51, of Herzliya; Vanir Luptin, 31, of Herzliya; Avi Biaz, 26, of Nes Tziona; Rahamim Kimche, 58, of Rishon le- Zion; Edna Cohen, 61, of Holon; and Yisrael Shikar, 45, of Rishon le-Zion. Israeli officials were deliberating Wednesday about how to retaliate. Possible responses include a new military offensive or even the expulsion of Palestinian Authority President Yasser Arafat. According to the Israeli daily Ha´aretz, however, Sharon will not propose that Arafat be expelled. Rather, the paper reported, sources in Sharon´s entourage said President Bush agreed to press for reforms in the Palestinian Authority that essentially would strip Arafat of his powers. "It was clear that" Arafat "must be moved to a different role within the P.A., customarily to a symbolic position, and the administrative responsibilities would be transferred to others," the sources told Ha´aretz. There also is speculation that a new military operation could target the Gaza Strip, the command center of Hamas, which claimed responsibility for the bombing. The Rishon le-Zion attack took place as Israeli Prime Minister Ariel Sharon was about to enter a meeting with Bush at the White House. The two leaders were informed of the attack during the meeting. Sharon, who cut short his U.S. visit, said before flying home that the bombing was "proof of the true intentions of the person leading the Palestinian Authority," a reference to Arafat. "Israel will not surrender to blackmail," he said. "He who rises up to kill us, we will pre-empt it and kill him first." As it has numerous times, the White House on Wednesday said Arafat must decide if he is for peace or terror. White House spokesman Ari Fleischer said Bush is waiting to see "what actions the Palestinians take" to halt militant attacks." U.S. Secretary of State Colin Powell called the bombing troubling, but did not criticize Arafat directly. At the same time, he said U.S. officials would press forward with efforts to put pressure on the Palestinian Authority to end corruption and rebuild a better security apparatus. "Every time one of these events happens, it takes us off a course we were on for a while," Powell said. "It´s a course we ultimately have to get back to. At the end of the day, we have to find a political solution." The Palestinian Authority condemned the bombing and said it would take action against the perpetrators. But Arafat also said his security forces were too weak to fight terror. The bombing, which ended a period of relative calm following Israel´s anti-terror operation in the West Bank, forced Sharon to skip a visit to New York. In a worrying postscript to the Rishon le-Zion attack, a Palestinian terrorist was seriously wounded Wednesday in what appeared to be a suicide bombing gone awry in northern Israel. The bomb went off, perhaps prematurely, as the terrorist approached a group of soldiers waiting at a bus station near the Megiddo Junction. The bomber was severely wounded in the blast and was brought to a hospital in Afula, where he underwent surgery. There were no other injuries. The Rishon le-Zion attack was the largest inside Israel since the army withdrew most of its forces from the West Bank following Operation Protective Wall. Israel launched the military operation in late March in an effort to round up terrorists and destroy the terror infrastructure in the West Bank. The operation did not involve the Gaza Strip. While the army has reported foiling terrorist attacks on a near-daily basis, Tuesday´s bombing left Israelis wondering how effective Operation Protective Wall really was. Hamas said the attack was revenge for Israel´s attack on the Jenin refugee camp last month. Israeli security officials said they believed the bomber had come from the Gaza Strip, not the West Bank. The attack occurred shortly after 11 p.m. Tuesday, when the pool hall was filled with dozens of patrons. The terrorist entered the third-floor pool hall carrying an explosives-packed suitcase. He detonated the explosives in the middle of the room. There was no security guard at the entrance to the club, which was operating without a license. The suitcase contained a large number of explosives, plus nails and metal scraps to cause greater damage. Part of the ceiling collapsed from the force of the blast, burying victims beneath the rubble. Prior to the attack, Israeli security officials said the military operation had dealt a serious blow to the terrorist infrastructure, but they expected Palestinian militants to try to resume terrorist attacks. On Tuesday, prior to the bombing, the Israel Defense Force chief of staff, Lt. Gen. Shaul Mofaz, said the military was prepared for wider action in the West Bank if attacks resumed. On Tuesday night, for example, Israeli troops arrested 29 Palestinians, among them two senior Hamas militants, and seized an explosive belt in an operation in the West Bank city of Tulkarm. The operation followed warnings of terrorists planning to leave the city in order to carry out suicide bombings inside Israel.