A suicide bomber has killed at least three people in a crowded market in the Israeli commercial capital, Tel Aviv.
There were chaotic scenes as people were rushed to hospital
Police say the attacker detonated about 5kg of explosives in a shop in the busy Carmel market.
Israeli TV showed chaotic scenes as the injured were rushed to hospital. More than 30 people were wounded.
A spokesman for the leftist Popular Front for the Liberation of Palestine said it had carried out the attack, the deadliest of its kind since August.
He named the bomber as Amer al-Fahr, from the Askar refugee camp near the West Bank town of Nablus.
His age was put variously at 16 or 18, making him one of the youngest suicide bombers to have attacked Israeli targets since the intifada began four years ago.
The bomber's mother, quoted by Israeli newspaper Haaretz, criticised those who had sent her son to his death.
"It's immoral to send someone so young," she said. "They should have sent an adult who understands the meaning of his deeds."
Palestinian leader Yasser Arafat condemned the bombing, as well as "killing on both sides", from his hospital bed in Paris, where he is currently undergoing tests for a blood ailment, his aide Nabil Abu Rdainah said.
A spokesman from Islamic militant group Hamas, Sami Abu Zuhri, told the Associated Press the blast was evidence that the "resistance is alive".
Terje Roed-Larsen, the UN envoy in the region, said the Palestinian Authority should "act without delay against those organising and perpetrating terror
and to bring them to justice".
Israeli Foreign Ministry spokesman David Saranga, quoted by AFP news agency, urged the Palestinian Authority to crack down on armed militants.
Later, Israeli military sources said two Palestinians were shot during a raid on Nablus. Hospital sources said three were killed.
Meanwhile, a group of European Parliament members on a visit to Gaza criticised the Israeli army's actions there as creating the conditions for suicide bombers.
The last major suicide attack on Israel came in August, when two bombs killed 15 people in the town of Beersheba.
The latest blast happened when the bomber walked into a shop with a small, 5kg device after 1100 (0900 GMT) on Monday.
Paramedics treated dazed shoppers on the ground, amid vegetables strewn on the pavement.
Founded 1967 after the Israeli occupation of the West Bank
Combines Arab nationalism with Marxist ideology
Based in Syria, but also operates in Lebanon, Israel and the Palestinian territories
Thought to have around 800 members
Once linked to Bader Meinhof and Japan's Red Army
Pioneered aircraft hijackings in the 1970s
Lost ground to Hamas in the 90s but still seen as a threat by Israel
At least 30 people were injured, four of them seriously.
Police reportedly blocked access to the market for fear of secondary explosions, and searched waste bins for explosives.
Israeli TV said the authorities were also searching for a car believed to be carrying a person involved in the attack.
Witness Michel Weizman told Israeli radio he was only 10 metres away when it happened.
"I saw lots of people lying on the ground, lots of
people wounded," he said.
Another named only as Motti said at first he thought fireworks or a gas canister had gone off.
"But then I saw a store, completely destroyed," he said. "Goods fell to the ground. People ran away. I lost my glasses and my hat."