Blast rocks central Jerusalem

The car burned for some time after the explosion

A nail-studded car bomb has exploded in west Jerusalem in the Russian compound, a residential neighbourhood known for its nightclubs and restaurants.

Three people have been treated for shock, but there were apparently no injuries.

We were lucky. Think what would have happened if this explosion succeeded

Jerusalem mayor Ehud Olmert

A BBC correspondent says the blast adds to a sense of national emergency in Israel which has been fed a daily diet of violence and disaster in the past week.

No one has yet claimed responsibility for the blast, but previous attacks like this one have been carried out by Islamic extremist groups.

It underlines the difficulty facing new US Middle East envoy-designate William Burns, who is to meet Palestinian and Israeli leaders on Sunday.

Mr Burns is to hold talks with Yasser Arafat in Ramallah in the morning and Ariel Sharon in Jerusalem in the afternoon.

Search for bombers

Police have put up roadblocks and deployed helicopters to search for the bombers, who - police believe - drove off in a second car after parking the one with the bomb.

Emergency services arrived on the scene quickly

Two men were reportedly seen parking the car and leaving the scene shortly before the explosion.

"We were lucky," said Jerusalem Mayor Ehud Olmert. "Think what would have happened if this explosion succeeded."

Police spokesman Shmuel Ben-Ruby said 25 people had been detained, but that police were not sure the people were involved in the explosion.

No one has yet claimed responsibility for the blast.

Near police station

The explosion, which could be heard across the city, occurred in a parking lot not far from central Jerusalem's main police station.

The parking lot is across from a courthouse where a nine people were appearing before a judge in connection with the collapse of a building that killed at least 23 people on Thursday night.

The hearing continued, and the judge ordered two of the people held until 29 May and the others until 31 May while the investigation continues.

The site is also not far from predominantly Arab east Jerusalem.

Our correspondent says it would not have been difficult for Palestinians to cross from east to west Jerusalem to plant the bomb, despite heavy security throughout Israel.

She said the mood among people at the scene was one of shock and anger.

It is the third apparent militant attack against Israeli targets in 48 hours. On Friday, explosions in Hadera and the Gaza Strip killed three apparent suicide bombers and injured more than 60 Israelis.