Some immediately fled to safety. Others were slower to realise the danger. Sigal, an Israeli woman running to catch a bus outside the market, said: "I heard a boom and smoke came out of the car. I asked a woman what somebody was doing with a car which didn't work." Then there was second explosion, and Sigal fled screaming.
Earlier that morning Yusuf Zughayar, an 18-year-old Palestinian from Anata refugee camp north of Jerusalem, had helped to place two suitcases in the car. Israeli and Palestinian police say that he and an unnamed companion belonged to Islamic Jihad, the militant Palestinian organisation, and were aiming to repeat last year's suicide bombing in the market which killed 15 Israelis.
As the two men drove up Jaffa road, the main thoroughfare in central Jerusalem, something went wrong. A senior Israeli police officer later said: "It was an amateur bomb." A premature explosion killed Mr Zughayar and his fellow bomber before they could enter the market. The blast tore apart their Fiat, hurling a large piece of metal to the other side of the road.
Within minutes of the attack Jews from Mea Sharim, an ultra-orthodox neighbourhood nearby, were crowding the balconies to look at the bodies of the dead bombers. Finally, a policeman threw sheets over them.
Even by the dire standards of suicide bombing in this part of the world, the operation was bungled. No Israelis were killed, and only one was seriously injured. The force of the explosion went mainly upwards, damaging the roof of the covered market, but leaving food on nearby stalls undamaged.
But politically Mr Zughayar and his companion did not die in vain. If their aim was to ensure that the so-called "land-for-security" deal agreed between Israel and the Palestinians at the Wye Plantation in Maryland last month is stillborn, then they have come close to achieving their aim.
On receiving news of the attack Benjamin Netanyahu, the Israeli Prime Minister, immediately adjourned the cabinet meeting called to ratify the deal reached at Wye. A statement said it would resume discussion only when Yasser Arafat, the Palestinian leader, proved he was "fighting an all-out war against terror". From members of the cabinet whose opposition to Wye was already known, there was an almost audible sigh of relief that they had an excuse not to start the limited Israeli withdrawal.
The effectiveness of the latest suicide bombing is all the greater because it took place at the end of a week when it began to look as if Mr Netanyahu did not want to implement the deal he signed in the US. "He keeps staring wistfully at the safe shore of the ideological right that he deserted," writes Hemi Shalev, the Israeli commentator. "He keeps acting like the old Bibi, who is good for the Jews, attacks the leftists, quarrels with the Palestinians and makes the Americans go out of their minds."
Mr Netanyahu demanded that two issues be settled before he even allowed his cabinet to discuss ratification. He wanted a written timetable for the arrest of 30 Palestinian suspects living in areas controlled by Mr Arafat, and revocation of the Palestinian charter by a fully convened Palestine National Council.
Neither reason was very substantive. He already had a verbal agreement on the Palestinians' arrests, two of whom are reportedly dead and others have little evidence against them. The US and the previous Israeli government agreed in 1996 that the Palestine National Council had revoked clauses in the charter to which it objected.
The problem for Mr Netanyahu is that there is no real centre to Israeli politics. He could abandon the hard right and the Jewish settlers in the West Bank without making any new friends with more moderate views. In Israel, differences between right and left are reinforced by divisions between both secular and religious Jews and different ethnic communities. By going ahead with Wye, Mr Netanyahu would split the coalition which elected him.
It is also difficult for the Israeli leader to sit still. In the talks in the US he came under real pressure for the first time from President Bill Clinton, which took him by surprise. Mr Netanyahu may have gone to Wye only because he thought Mr Clinton was weakened by scandal, but he discovered the President was on the rebound. The success of the Democrats in the mid-term elections puts the White House in a stronger position to pressurise Israel in the run-up to Mr Clinton's address to the Palestinian National Council next month.
The Wye agreement is in trouble on another front. Tsahi Hanegbi, Israel's Justice Minister, says Mr Zughayar belonged to Islamic Jihad, a largely moribund but militant organisation. Palestinian security confirmed this. But Hamas, which claimed responsibility for the previous suicide bombing, on an Israeli school bus in the Gaza strip, claimed responsibility for the latest explosion.
Clearly, however, a new suicide bombing campaign is under way. Given that the targets are schoolchildren and shoppers, at some point in the future there are bound to be heavy casualties.
There is a community of interests between the Palestinian militant organisations and the Israeli right. Even a botched suicide bombing has a serious political impact, because the right will use it to discredit the idea of an agreement between Israel and Mr Arafat, an objective shared by Hamas and Islamic Jihad. It is this which makes it inevitable that there will be more suicide attacks.Reuse content