"It has become difficult to confirm who carries out these attacks" - Lyse Doucet reports

In a statement sent to news agencies in Jerusalem, Islamic Jihad called the car bombing an heroic attack on the American-brokered peace deal between Israel and the Palestinians, which it denounced as a great conspiracy.

Several members of Islamic Jihad have been arrested by the Palestinian security forces.

The Palestinian leader, Yasser Arafat, had earlier promised what he called a 100% effort against terrorism.

Palestinian dissident radio, Al-Quds, said that one of the perpetrators, 22-year-old Yusuf Muhammad Ali al-Sughayr, had been released three months before, following a two-year detention in "Zionist enemy jails" charged with belonging to the Islamic Jihad Movement.

Yusuf Muhammad Ali al-Sughayr - device went off prematurely

The radio described the attack as an "heroic martyrdom operation".

Earlier, Islamic Jihad's Secretary-General also said his group had carried out the attack.

In an interview with the Arabic service of Radio Monte Carlo, Mr Shallah confirmed that the two bombers, both killed in the blast, had been "martyrs of the Islamic Jihad".

Ramadan Abdallah Shallah: "Yes, I confirm that... [the bombers] are martyrs of the Islamic Jihad Movement" (in Arabic)

"They carried out Friday's attack in Jerusalem in response to the crimes of the Zionist enemy which is continuing its policy of settling and Judaising the occupied territories without interruption," Mr Shallah said.

A leaflet, faxed to newsagencies in Jerusalem in the name of Islamic Jihad on Saturday, said: "This heroic attack, which was not the first and will not be the last, was carried out ... to confront the great conspiracy that aims to liquidate the Palestinian cause through the Oslo and Wye Plantation agreements."

Palestinian arrests

Palestinian forces moved against the militant Islamic Jihad group, arresting several activists, Palestinian officials said on Saturday.

Yasser Arafat's Palestinian Authority pledged to crack down on militants after the Friday attack, but said Israel should not use the incident to avoid implementing the Wye River accord.