There is disagreement among Palestinians about the intifida's future
The incident happened on a road leading to a kibbutz about eight kilometres (five miles) from the West Bank.
The attack followed signs that the Palestinian Authority had been trying to rein in militant groups which oppose a ceasefire agreed with Israel on 26 September.
In other violence a Palestinian was shot dead and three others injured when Israeli forces opened fire on their taxi in the flashpoint West Bank town of Hebron, Palestinian security official said.
The US wants to calm tensions in the region as it tries to build an international coalition to respond to last month's suicide plane attacks in New York and Washington.
The explosion is the first caused by a Palestinian suicide bomber against Israel since the 11 September attacks.
Palestinian police arrested a number of militants on Saturday, a day after the leadership demanded an end to attacks on Israel and accused militants of violating the truce and damaging Palestinian interests.
Among those arrested were Abbas Sayed, a senior Hamas official in the city of Tulkarm, and Anas Shrateh, a member of Islamic Jihad in Nablus.
Police attempted also to arrest Hamas activist Deya Darwazeh in Nablus but he escaped capture.
Palestinian 'self-defence'
But a key factional leader has rejected the latest call by the Palestinian authority for a united commitment to a ceasefire with Israel.
Marwan Bargouthi, who leads Palestinian leader Yasser Arafat's Fatah movement in the West Bank, said it was the right of Palestinians to defend themselves.
Two Palestinians were killed overnight in Hebron during exchanges of fire as Israeli tanks and troops held positions they had taken up on Friday in Arab neighbourhoods of the West Bank city.
Mr Bargouthi said that, with as many as 30 Palestinians killed by Israel since the authority recommitted to the ceasefire 10 days ago, it was the right of Palestinians to respond in kind.
Six Israelis have also died in Palestinian militant attacks.
Arrest difficulties
In another interview published in the German weekly Bild am Sonntag on Sunday, Israeli Foreign Minister Shimon Peres declared Israel had given the Palestinian Authority a list of 108 of "the most dangerous terrorists":
"We have demanded that at least the 10 worst offenders should be arrested," Mr Peres added, but he said Mr Arafat had not done so.
Gaza preventative security chief Muhammad Dahlan said he could not round up militants while Israel sends in tanks to raid Palestinian-ruled areas.
Israeli tanks have also penetrated 500m inside Palestinian-controlled territory in northern Gaza.
The Israeli defence forces have not said how long their forces will stay there or in Hebron.