Nadia Zekra, 49, was a member of a group of middle-class Palestinians based in London, David Calvert-Smith, for the prosecution, said.
The group believed that Yasser Arafat, the Palestinian leader, "was misguided in his attempts to come to any accommodation with Israel and wished to hinder the process", Mr Calvert-Smith said.
The bomb was set off in July 1994 after the-then Israeli leader, Yitzhak Rabin, and King Hussein of Jordan had signed the Washington peace declaration.
It shattered the windows of "every house, shop and car within a radius of a few hundreds yards. People inside the buildings and outside on the street were thrown to the ground. Substantial debris flew as far as 300 yards or so". Damage to the embassy, in Kensington Palace Gardens, amounted to more than pounds 5m.
The bomb was in the back or boot of an Audi parked close to the embassy. Mr Calvert-Smith said that it was left there by Mrs Zekra, of West Kensington, west London. She denies causing an explosion.
The prosecution alleges that another woman and two men in the dock with her had taken part in the "planning and manufacture" of the bomb and of a second bomb which exploded the following day outside the offices of a Jewish charity.
Samar Alami, 30, of South Kensington, Jawad Botmeh, 28, of Bloomsbury, central London, and Mahmoud Abu-Wardeh, 25, of Putney, south-west London, deny conspiring to cause explosions between January 1993 and May 1995. They also deny possessing an explosive substance, triacetone triperoxide, of a nature likely to endanger life or cause serious damage, and possession of firearms.
Mr Calvert-Smith said the embassy bomb was triggered either by a timing device "or more likely, by remote control". That day letters were posted addressed to two Arabic newspapers and the Palestine Liberation Organisation's offices in London, he alleged.
They were from the "Palestine Resistance Jaffa Group in Palestine" and claimed responsibility for the embassy bomb and one at premises in north London known as Balfour House. One exploded the following day at the building which belongs to the Jewish Philanthropic Organisation for Israel and the Middle East.
"Once again enormous damage was caused to surrounding buildings and a number of people were injured," Mr Calvert-Smith told the jury.
Of the accused, he said: "All are of Palestinian origin and are well integrated into English society and the middle and upper middle classes."
Mrs Zekra was allegedly seen by a diplomatic protection police officer parking the car near the embassy. She said she was delivering a present and was told to be back in five minutes. The car's details were checked by radio when she did not return but revealed nothing suspicious.
The case continues.Reuse content