Israel has insisted that Syria was behind Friday's suicide bomb in Tel Aviv that killed five people.
The attack has put the truce under strain
Israeli intelligence chiefs met foreign ambassadors in Jerusalem on Monday to present their case alleging Syria's involvement in the attack.
The Israeli military, meanwhile, said it had foiled another plot by Islamic Jihad when it seized a car rigged with explosives in the West Bank.
Syria has denied any involvement in the nightclub bombing.
"We see Syria as responsible by allowing those extremists to have their headquarters there, their training camps there and to give them all the assistance that they're asking," Foreign Minister Silvan Shalom said.
In the investigation following Friday's attack, Israeli military officials said they found a car packed with explosives in Arrabeh, northern West Bank on Monday.
"The car was ready for use in an attack and it was apparently prepared by the group which carried out the suicide bomb in Tel Aviv," said a military spokesman.
Islamic Jihad militants in Damascus said they staged the Tel Aviv attack, but Syria denies any involvement.
Syria said it was facing unprecedented international pressure following the attack, and feared that it was among the US' next military targets.
Israel's foreign ministry said Mr Shalom had summoned ambassadors from the European Union and member states of the UN Security Council to Monday's meeting.
The move comes after Israeli security officials said on Saturday that the government would launch a diplomatic effort in the hope of persuading the UN to condemn Syria for the bombing.
However, the Israeli foreign ministry said it would not make its evidence public.
Syrian Foreign Minister's Farouk al-Shara repeated strong denials that Syria was involved.
He described Israel's accusation as "baseless" and added that he could not rule out "Israeli fingers" being involved in the blast.
Blow to truce
Mr Sharon told his cabinet on Sunday that peace efforts would be halted unless the Palestinian Authority acted against Islamic Jihad, who he said had carried out the bombing on the orders of its leaders in Syria.
If no action was taken, "Israel will have to step up its military activities that are aimed at protecting the lives of Israeli citizens", Mr Sharon said.
Funerals for the four victims were held on Sunday
"There will not be any diplomatic progress, I repeat, no diplomatic progress, until the Palestinians take vigorous action to wipe out the terror groups and their infrastructure in the Palestinian Authority's territory," Mr Sharon told the Israeli cabinet.
The Tel Aviv blast was the first major blow to a truce agreed by Mr Sharon and Mr Abbas at their Egypt summit earlier this month.
Seven people have been detained by Israeli and Palestinian forces over the bombing, which injured about 50 people in addition to those killed.
Palestinian leader Mahmoud Abbas has vowed to punish those responsible.
Israel has already announced it is freezing plans to hand over control of five West Bank towns to Palestinian security forces, which had been promised after the 8 February summit in Egypt.
Senior international officials including US Secretary of State Condoleezza Rice are preparing for a conference in London on Tuesday on the future of Palestinian reforms and the Middle East peace process.