Israeli police say a suicide bomber detonated explosives at a shopping center in a suburb of Tel Aviv, killing himself and at least two other people. A Lebanese television station is reporting the Al-Aqsa Martyrs Brigades, which is linked to Palestinian leader Yasser Arafat's Fatah faction, is claiming responsibility for the attack.
Israeli police say the suicide bomber set off an explosion in a shopping mall in Petah Tikva, east of Tel Aviv.
A police spokesman says there was a "terrorist attack" at the mall, and security officials closed off the area to search for a possible second bomber.
Medical teams evacuated the wounded to area hospitals.
Police say a body at the scene is apparently that of the suicide bomber.
This is the first suicide bombing in Petah Tikva since the current Israeli-Palestinian conflict began in September 2000.
Israeli government spokesman Dore Gold says despite calls from Palestinian leader Yasser Arafat for an end to attacks on civilians, the suicide bombings are continuing.
"What our hope was that the Palestinian Authority would change its direction. That it would make a strategic decision that terrorism no longer pays off, that terrorism must be stopped," he said. "nfortunately we don't see that change. Some people think it is a problem of Palestinian capabilities, that they can't do it. We think it is a problem of Palestinian will."
The official Palestinian news agency, WAFA, is reporting the Palestinian Authority condemned the attack in Petah Tikva.
Israeli Defense Minister Binyamin Ben-Eliezer warned earlier that there were daily attempts by Palestinians to send suicide attackers into Israel, but most of them have been foiled by the military.
The explosion came hours after Israeli forces raided Bethlehem, as part of a continuing series of incursions to track down militants involved in attacks against Israelis.
Israeli security sources say one of those arrested in the sweep is Ahmed Mughrabi, a leader in the Al-Aqsa Martyrs Brigades.
Israeli sources say he was responsible for planning a suicide bombing that killed two Israelis in the Tel Aviv suburb of Rishon Letzion last week.
Elsewhere in the West Bank, Israeli forces withdrew from Qalqilya but continue to surround the area, as well as the nearby town of Tulkarm.
The Israeli military describes the recent incursions into Palestinian-ruled towns as pinpoint raids based on intelligence information.