-One person was killed and more than 30 were wounded when a bomb ripped through a Jerusalem bus Wednesday, just hours after Israeli raids on Gaza in response to an upsurge in rocket fire from the Gaza Strip to Israeli southern cities.
Police and officials said the bomb had been hidden in a bag at a bus stop near Jerusalem's central bus station at the western entrance to the Holy City.
"There was an explosion around 3:00 pm (1300 GMT) near a bus stop where two buses had stopped to pick up passengers," Jerusalem police chief Aharon Franco told reporters at the scene.
"Apparently a bomb was left in a bag next to a public telephone."
Several hours after the blast, a woman who was critically wounded in the attack died of her injuries, Israeli radio and television stations said, citing officials at the Hadassa hospital in Ein Kerem.
Defence Secretary Robert Gates in Cairo condemned the blast as an "horrific terrorist attack."
Police spokesman Micky Rosenfeld said 35 people had been wounded in the blast, which was the first major bombing in Jerusalem since September 2004, when a teenager bomber blew herself up killing two at a bus stop in French Hill, a settlement neighbourhood in east Jerusalem.
Of the wounded in Wednesday's attack, at least three people were said to be in serious condition, and around five sustained moderate injuries, medics said, with many suffering from shrapnel wounds.
"Four are very seriously injured and five are in moderate condition, while the rest are less badly hurt," Uri Shacham, a senior paramedic with the Magen David Adom emergency services told reporters at the scene.
The explosion, which shook buildings hundreds of metres (yards) away, hit the number 74 bus as it stopped to pick up passengers at a stop between the central bus station and the ICC conference centre.
An AFP correspondent saw people lying on the floor covered in blood, and many cars and buses with shattered windows.
Sirens echoed through the city as dozens of ambulances and police cars raced to the scene, a transit hub through which well over a thousand buses pass every day.
ZAKA volunteers were among the first on the scene of the bomb attack, which took place just outside their headquarters in central Jerusalem.
They were meeting to discuss arrangements on sending a rescue and recovery team out to Japan, ran to the scene of the explosion, carrying their emergency first aid equipment.
Motti Bukchin, a ZAKA volunteer declared:"We immediately began treating the wounded – two women who were lying on the pavement, by the side of the bus. We were joined by other volunteers and emergency workers who assisted in treating and evacuating the wounded to hospital. We have not witnessed scenes like these in Jerusalem for years."
The ZAKA volunteers worked on clearing the scene, including blood and body parts which have been spread over a wide area by the blast.
Following the attack, Israeli Prime Minister Benjamin Netanyahu delayed by four hours his departure for Moscow where he is due to hold talks with Russian President Dmitry Medvedev and Prime Minister Vladimir Putin.
But he stopped short of cancelling the visit.
Ahead of his departure, Netanyahu was holding talks with Chief of Staff Benny Gantz and other top security and defence officials, his office said
The talks were also believed to focus on Israel's response to an upsurge in rocket fire from the Gaza Strip, where Palestinians on Wednesday fired two Grad rockets at the southern city of Beersheba. Rockets also fell near the city of Ashdod where the mayor decided to cancel school for the rest of the week.
Earlier on Wednesday, Netanyahu had warned it could take "an exchange of blows to put the terrorists out of action."
"It may be that it will take an exchange of blows, and it may be that it will take some time, but we are very determined to strike at the terrorist elements' ability to harm our citizens," he told MPs.
Defence Minister Ehud Barak, who is currently in the United States, said Israel would not tolerate any attacks, be they in Jerusalem or against towns and cities in the south.
"We will not tolerate attacks on Israeli citizens, not in the southern communities and not in Jerusalem," his office quoted him as saying.
"As far as we are concerned, Hamas is responsible for the shooting in the south, the Grads on Beersheba, and that responsibility has a price."
Despite the Grad attacks and the firing of another seven mortar rounds, Israel held back from an immediate response.
The first Grad struck the centre of Beersheba around dawn, moderately wounding one man, while the second struck harmlessly in an open area.
The Al-Quds Brigades claimed responsibility for the attacks, and vowed to continue targeting cities deep inside Israel.
"From now on, there are no more red lines for the resistance as long as the enemy... keeps killing civilians," spokesman Abu Ahmad said.
In response to the rising rocket fire from Gaza, Home Front Defence Minister Matan Vilnai warned that a fresh war on the Islamist Hamas movement was looming.
"It's only a matter of time until we clash with Hamas again, and again teach them the rules," he told army radio. "I have no doubt that it will happen."
Hamas’ return to openly declared wide-scale terror activity marks a turning point since the cessation of the Israeli operation against the Islamist movement in Gaza in January 2009.
Wednesday’s bus attack and rockets firing came only days after a ship carrying tons of smuggled arms was intercepted by Israel en route to Gaza. The ship's cargo contained not only a large number of mortar shells but also advanced weapons, including radar-guided anti-ship missiles.
A week ago, an Israeli family was attacked in Itamar, in the West Bank, by terrorists who stabbed to death the parents and three children, including a three-month old baby girl, as they were sleeping.