Terror group claims responsibility for Jerusalem bomb

Palestinian group Islamic Jihad said it planted a bomb that killed two Jews in Jerusalem and stalled the peace process.

Palestinian group Islamic Jihad said it planted a bomb that killed two Jews in Jerusalem and stalled the peace process.

And it chillingly promised more terror attacks on Israel.

A statement said the atrocity was in retaliation for Israeli attacks on "defenceless" Palestinians.

And the group ominously warned: "Wait for more."

The bomb exploded in west Jerusalem near the busy outdoor Mahane Yehuda market minutes before an Israeli-Palestinian truce was to be formally announced.

Witnesses said moments earlier the white car had been chased by police into a narrow alley near the market, which sells sells food, vegetables and clothing. Ten people were injured.

Police said they were checking whether the assailants got away. It had been thought that the two people killed were the bombers, but Jerusalem Police Chief Yair Yitzhaki said the man and woman killed were not in the car, and both were Israeli.

Mr Yitzhaki said the explosion was so powerful that police were unable to identify the make of the car.

One of the dead was the daughter of right-wing National Religious Party leader Yitzhak Levy.

The blast came shortly before Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat were scheduled to make separate announcements of a ceasefire - an attempt to stop more than a month of fighting that has left at least 162 people dead, most of them Palestinian.

The announcements were postponed without explanation, before the explosion. Israel said the truce with the Palestinians would be still be implemented.

Barak said he blamed Islamic militants for the explosion. He demanded that the Palestinians re-arrest militants recently freed. Arafat denied the allegation.

Arafat condemned the bombing, saying he was completely against it.

Israel's deputy Defence Minister Ephraim Sneh said: "The responsibility in essence lies here on the Palestinian Authority which freely released these animals of prey. And they're the ones who must return them to the cage as fast as possible if they want to speak in serious negotiations with us in the future."

That charge was immediately denied by officials of the Palestinian Authority.

There was no immediately claim of responsibility, though Israeli officials said they believed Palestinian militants, either from the Hamas or Islamic Jihad groups, were responsible.

Peace-broker the US said it still hoped peace could be found. President Bill Clinton said he hoped both sides could move forward and bring about a peaceful settlement, working against the terrorists.

Shortly afterwards Israeli troops shot dead a 19-year-old Palestinian stone thrower in the West Bank village of El-Khader, near Bethlehem.

Yaakov Hassoum, who owns a store near the site of the explosion, said he tried to pull the woman from the flames. "I saw her on the ground and her legs had been blown off. I hoped she was alive, but she was dead."

An Israeli soldier, Oshri Atun, said he saw a white sedan being chased by a police van with sirens wailing. The car turned into a side street, and seconds later the bomb exploded, he said.

Another witness, who only gave his first name, John, said he heard a powerful blast. "When I looked down the street, there was a big fire and people were hurt," he said.

Hamas and Islamic Jihad have said they would carry out new terror attacks in Israel.

The leader of Hamas, Sheik Ahmed Yassin, said yesterday the Palestinian uprising against Israel would continue. He said the protests were an expression of popular anger and could not be reined in by an order from Mr Arafat.

Israeli army spokesman Brig. Gen. Ron Kitrey said before the bombing that he had detailed warnings about attacks, and Israeli security forces have been on high alert for the past few weeks.

For years, the market - spread over several blocks of a predominantly religious neighborhood - has been a target for those trying to sabotage peace between Israelis and Palestinians.

It was the scene of a car bomb in November 1998 that killed two suicide bombers and wounded 21 other people. Hamas claimed responsibility. And in July 1997, two militants blew themselves up in the area, killing themselves and 16 shoppers.

Dozens have been killed at the market since the 1960s. Palestinian militants with explosives strapped to their bodies have blown themselves up in the narrow, cobbled lanes or detonated car bombs on the larger streets.

The market is closed to traffic during shopping hours.