The Palestinian militant groups Hamas and Islamic Jihad have ended their ceasefire after an Israeli missile attack in Gaza killed one of Hamas' senior officials, Ismail Abu Shanab.
The groups had declared a three-month ceasefire in June, but a bus bomb in Jerusalem earlier this week - for which both groups claimed responsibility - left 20 people dead.
Abu Shanab's car was destroyed by Israeli missiles
What many had predicted after Tuesday's bus bomb in Jerusalem has now happened.
The fragile ceasefire - which had at least reduced the level of violence over the last seven weeks - has collapsed, and with it any lingering hope of implementing the latest peace plan, known as the roadmap.
The Israeli Government never took the ceasefire seriously, and argues it is entitled to kill Hamas leaders since the Palestinian Authority is failing to stop suicide attacks like the one in Jerusalem.
Experts question Sharon's policy of targeted assassinations
But Israel has questions to answer, too.
Why has it chosen to revive its controversial policy of assassinating leading Islamic militants, when this was bound to kill off the ceasefire?
And why target a man who was not in the military wing of Hamas, but a senior political figure - and one regarded as relatively pragmatic?
It is not clear whether Israeli Prime Minister Ariel Sharon had a green light from Washington.
He may have thought he had.
But coming hard on the heels of the bombing in Baghdad, the death of the ceasefire is a serious setback for the Bush administration's efforts to reform and reshape the Middle East.