The Israeli army says Palestinian militants detonated a car bomb near a shrine in the West Bank city of Nablus overnight, but caused no injuries or damage.

A spokesman said the bomb went off next to Joseph's Tomb shortly after midnight, when Israeli troops were guarding a small group religious Jews praying inside.

Meanwhile, Israel's Vice Prime Minister and Labor Party leader Shimon Peres held talks with Palestinian Cabinet Minister Mohmmed Dahlan in Tel Aviv late Wednesday. It was the first high level contact between the two sides since last week's suicide bombing in Tel Aviv that killed five Israelis.

Mr. Peres told Israeli radio one of the topics he discussed was a possible hand over to the Palestinians of businesses held by Jewish settlers in the Gaza Strip, when Israel pulls out of the territory later this year.