At least 24 people were reported killed and 80 injured by two suicide bombers in central Tel Aviv. Israeli Prime Minister Ariel Sharon is calling a special session of his security cabinet to discuss the situation.
The attack took place at the end of the working day in an area of Tel Aviv popular with foreign workers. Two suicide bombers attacked a crowd near the old bus station in Tel Aviv. Israeli television showed rescue personnel rushing to the scene and working feverishly on the victims.
The militant Palestinian group, Islamic Jihad claimed responsibility.
An Israeli government spokesman blamed, what he called "terrorist groups" supported by Yasser Arafat's Palestinian Authority. A senior Palestinian official denied those charges, saying Israeli policies were to blame for such violence.
The last bombing in an Israeli city was last November when a Palestinian suicide bomber killed 11 other people on a bus in Jerusalem.
Israeli troops re-occupied all major West Bank population centers except Jericho last June, following a series of attacks by Palestinian suicide bombers in Israel. The Israeli operations drew vows of revenge from Palestinian militant groups.
Israel has repeatedly said its military operations are necessary to prevent further attacks. Critics argue that despite harsh security measures, Israel has been unable to stop attacks carried out by individual Palestinian militants. Since the current Palestinian uprising began 27 months ago, nearly 1,800 Palestinians and 700 Israelis have been killed in suicide bombings, targeted killings, and almost daily clashes.