BBC News Online has been monitoring reaction to the Gaza attack which killed three Americans:
US President George W Bush condemned the attack as a "vicious act of terrorism" and vowed to bring those responsible to justice.
He also condemned the Palestinian Authority for failing to crack down on militant activity.
"Palestinian authorities should have acted long ago to fight terror in all its forms," he said.
"The failure to create effective Palestinian security forces dedicated to
fighting terror continues to cost lives."
The US State Department also vowed to track down the killers and Secretary of State Colin Powell phoned the Palestinian prime minister.
According to an aide of Palestinian Prime Minister Ahmed Qurei, Mr Powell phoned him to urge "action to put an end to violence and 'terrorism'".
"We will pursue the perpetrators until they are caught and brought to justice," said Tom Casey, State Department spokesman also said.
EU's foreign policy chief, Javier Solana. said it was an "unacceptable attack against foreign and diplomatic personnel".
Palestinian leaders joined Mr Solana in condemning the attack whilst the UN warned of an "ominous" development.
UN Middle East envoy Terje Roed-Larsen called the attack an "ominous widening of the conflict".
There has been a mood of anxiety among some Palestinians over the possible US reaction.
"We wonder what [George W] Bush will do now," lamented Ahmed, a worried resident of Jabalya.
"I guess he is mad at us."
The Palestinian leadership condemned the attack and ordered an investigation.
For Palestinian leader Yasser Arafat, it was "an ugly crime that targeted American observers as they were on their mission for security and peace".
There was little reaction from Palestinian militant groups immediately after the attack although one, Islamic Jihad, stressed it would have had no reason to attack Americans.
"In the land of Palestine, it's not proper to target Americans nor any other nations [other than Israel]," said spokesman Nafez Azzam.
For Israel, Zalman Shoval, an adviser to Prime Minister Ariel Sharon, said the attack showed no one was "immune to Palestinian terrorism".
"This is further proof that as long as the Palestinian Authority does
not dismantle terrorist organisations, the process will not
proceed," Foreign Minister Silvan Shalom added.