Shortly before midnight a suicide bomber blew himself up in a crowd of young Israelis waiting to get into a beachfront nightclub in Tel Aviv.
Israeli police say the bomber was spotted and prevented from entering the club. They say if he had gotten inside the carnage would have been even worse.
It is unclear who was behind the attack with major Palestinian militant groups saying they had nothing to do with it.
A statement released by Palestinian President Mahmoud Abbas in Ramallah vowed to track down and punish those responsible, saying this was an attempt to sabotage the peace process.
The bombing shatters weeks of calm after Mr. Abbas declared a truce during a summit with Israeli Prime Minister Ariel Sharon in Egypt earlier this month.