Explosions in the Israeli port city of Ashdod have killed 10 people and wounded 20 others.
Police initially said the twin blasts appeared to be the result of a worker accident at the port.
However, authorities later linked the blast to terrorism and said two of the dead appear to be suicide bombers.
The attack marks the first time suicide bombers have penetrated a strategic Israeli facility since the start of the Palestinian uprising more than three years ago.
Earlier Sunday in the Gaza Strip, Palestinians said Israeli troops shot dead three Palestinians near the Israeli border. The Israeli army says it fired at three men suspected of planting roadside bombs. The army did not confirm the fatalities.
In other developments, a Palestinian judge citing insufficient evidence has ordered the release of four Palestinians facing trial for killing three Americans in a bomb attack last year.
The four were arrested after a bomb blast in October killed three Americans in a diplomatic convoy near the Erez crossing between Israel and the Gaza Strip.
Palestinian prosecutors argued that the men had planted the bombs to blow up Israeli tanks entering Gaza, and had not targeted the U.S. security personnel.
Sunday's violence occurred ahead of talks expected later this week between Palestinian Prime Minister Ahmed Qureia and his Israeli counterpart, Ariel Sharon. The two leaders were expected to discuss the U.S.-backed peace plan, but no formal agenda has been announced.