A deadly bomb blast near a market here has shattered what was supposed to have been a moment of truce.
Israelis had been put on heightened alert to the possibility of a terror attack, and the dire warnings were borne out Thursday, when a bomb blast killed two people and lightly wounded nine others near the Mahane Yehuda open-air market in central Jerusalem.
Police identified the dead as Hanan Levy, 32, and Ayelet Hashahar-Levy, 24. The two were not related.
Hashahar-Levy was the daughter of Yitzhak Levy, leader of the National Religious Party.
She had recently moved to Jerusalem and was dropping her belongings off at a house in the area when the bomb went off, police said.
One witness said he tried to pull her from the flames.
“I saw her on the ground and her legs had been blown off,” said Ya’acov Hasson, a Magen David Adom volunteer.
“I hoped she was alive, but she was dead.”
Another witness said, “We did not see anyone trying to run away.”
In a statement faxed to the Reuters news agency, Islamic Jihad claimed responsibility for the blast, which the group said was “not a suicide operation.”
The perpetrators were not among the dead, and police immediately closed off the streets leading to the downtown area to search for the assailants and other bombs.
The bombing occurred just as Prime Minister Ehud Barak and Palestinian Authority President Yasser Arafat were expected to issue simultaneous statements announcing an agreement reached by the two sides to end the violence that began in late September.
Instead, Barak issued a statement condemning the attack.
He also said the Palestinian Authority was responsible for the bombing because it had recently freed Islamic militants from jail.
The Palestinian Authority must “return to jail all the prisoners it released over the last weeks and fight terror again,” the statement said.
Barak also said Israel will continue to combat terrorism and that its spirit would not be broken by the attack.
When asked for his reaction to the bombing, Arafat told reporters, “We are against it completely.”
The explosion occurred shortly before 3 p.m. in a small alley close to the market.
On Jaffa Street, near the scene of the attack, right-wing demonstrators later gathered and called for revenge.
They chanted, “Death to Arabs” and “We want revenge.”
Israel’s police commissioner, Yehuda Wilk, said it is probable that a heightened security presence in the area forced the terrorists to park their car on a side street, which greatly reduced the number of casualties.
“I think our expanded security presence deflected them to this area. If it exploded on a main artery, we would have had” far more casualties, “based on the amount of explosive material,” Wilk said.
The agreement that Barak and Arafat were going to announce in simultaneous statements had been worked out in a late-night meeting Wednesday in the Gaza Strip between Arafat and Cabinet minister Shimon Peres.
Peres said it included a list of steps both sides agreed to take simultaneously to reduce the violence.
As a result of the agreement, Israel postponed plans to retaliate for the deaths of three soldiers in clashes with Palestinian gunmen earlier Wednesday.
The announcements were to have been made hours before the bombing, but it was delayed by a Palestinian demand that all Israeli tanks be withdrawn from self- rule cities first as a sign of good faith.
Earlier Thursday, however, Arafat issued a statement calling for an end to violence, while expressing support for peaceful demonstrations.
Israel later pulled back tanks and heavy armored vehicles stationed around Palestinian-ruled cities, and the Palestinians restrained rock-throwers.
But on the ground, the tensions continued.
Two Palestinians were killed Thursday and at least 80 were injured during clashes in the West Bank, according to local hospital officials.
Other reports said Palestinian police were not intervening to disperse the rioting, and one report said a Palestinian officer had fired on Israeli troops in the Gaza Strip.
Meanwhile, Hamas militants rejected the agreement and said they would step up their efforts against Israel.
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