Israeli Defence Minister Shaul Mofaz has accused Syria of involvement in Friday's Tel Aviv suicide bombing in which four people were killed.
Israel says Palestinian efforts to stop terror have failed
He was speaking hours after Palestinian militant group Islamic Jihad's Damascus office said it carried out the attack.
The group's leaders in Gaza deny any involvement, suggesting a split, says the BBC's Barbara Plett in Jerusalem.
The nightclub blast was the first major blow to a truce agreed by Israeli and Palestinian leaders earlier this month.
Seven people have been detained by Israeli and Palestinian forces over the bombing, which injured about 50 people in addition to the four killed.
Pressure on Syria
A statement issued by Mr Mofaz's office said "Israel sees Syria and the Islamic Jihad movement as those standing behind the murderous attack in Tel Aviv".
However, he did not immediately threaten retaliation against Damascus.
A Syrian foreign ministry official said his country had no hand in the attack and had shut down Islamic Jihad's Damascus office.
A video was shown of a man claiming to be the bomber
Mr Mofaz also announced that Israel was freezing plans to hand over control of five West Bank towns to Palestinian security forces, which had been promised after the 8 February ceasefire.
Long-standing tension between Israel and Syria focuses on the Golan Heights, a rocky plateau in south-western Syria which Israel seized in the closing stages of the 1967 Six-Day War.
Syria has come in for fierce international criticism since the killing of former Lebanese Prime Minister Rafik Hariri - a vocal opponent of Syria's presence in Lebanon - in a massive bomb attack in Beirut on 14 February.
Reaction to the assassination was one of the main themes of US President George W Bush's five-day tour of Europe earlier this week.
An Islamic Jihad official in Damascus told news agencies the bombing was in retaliation for Israel's violation of the truce.
"The calm period with the [Palestinian] Authority was an agreement for a month and that has ended," the official, who gave his name as Abu Tareq, told the Associated Press.
"Israel has not abided by the pacification period. This is the main reason that led to this operation," he added, without giving details.
Islamic Jihad officials in the West Bank and Beirut echoed the claim, but the group's leadership in Gaza continued to deny that it was responsible.
Earlier on Saturday, Arabic TV channel al-Jazeera aired a video of a man, said to be the suicide bomber Abdullah Said Badran, saying he would attack Israel: "Our response will be killing for killing, shelling for shelling and blood for blood."
Our correspondent in Jerusalem says the contradictory statements coming from various Islamic Jihad officials could suggest a divide between the group's inner circle, based in Gaza, and its outside leadership in Syria, which is said to have more influence over cells in the West Bank.
The leader of the Palestinian Authority Mahmoud Abbas has condemned the attack and promised to "hunt down" those responsible.
"The Palestinian Authority will not stand silent in the face of this act of sabotage," Mr Abbas said in a statement after meeting security chiefs.
Mr Abbas blamed a "third party" but went no further.
Raanan Gissin, a top adviser to Israeli Prime Minister Ariel Sharon, told the BBC that the Palestinian Authority must take "the necessary, concrete steps to dismantle the terrorist organisation, collect the illegal weapons, make the necessary arrests".
US Secretary of State Condoleezza Rice called for the Palestinians to take "immediate, credible steps" to find those behind the attacks.