HADERA, Israel - A car packed with nail-studded explosives blew up next to a crowded Israeli commuter bus Wednesday, sending the bus flying into a building as victims writhed on the ground and nearby stores burst into flames. Two Israelis were killed and more than 50 were hurt in the blast blamed on Palestinian militants, further dampening hopes for a near-term Israeli-Palestinian truce.
Israel said it ultimately held Palestinian leader Yasser Arafat responsible for the blast, and that it would retaliate. Prime Minister Ehud Barak convened his security Cabinet for an emergency session Wednesday evening to approve a response. In the past, Israel has rocketed Palestinian targets over the killings of civilians.
The bomb, made of homemade materials and apparently detonated by remote control, went off in downtown Hadera, a working-class town in northern Israel, at about 5:20 p.m. local time - evening rush hour.
It detonated as the bus passed the rigged car, parked outside a pizza restaurant. The force of the blast propelled the bus across the sidewalk and then front first into a bakery.
One woman had both legs blown off below her knees. She was writhing in pain and still conscious when she was wheeled on a stretcher to an ambulance. A bystander pumped the chest of a man lying on the ground.
The pavement was littered with overturned cafe tables, shards of glass and metal and victims' shoes. Rescue teams used a power saw to extricate trapped and wounded passengers.
''I saw people scattered on the ground, people without limbs,'' said Benny Tapiro, 22, who works at a photo store a few yards from the blast site.
''I saw a baby on the ground and his father was near him and injured in the back. I gave him over to the ambulance crew,'' Tapiro said. The 2-year-old was taken to a nearby hospital.
Doctors and police said two people were killed and 55 wounded, including three in serious condition.
The blast turned the rigged car into a twisted pile of smoking metal and blew out the windows of the bus. Several nearby stores caught fire. Thick smoke rose into the air.
''The whole bus flew in the air from the explosion,'' a witness, identified as Shmuel, told Israel radio. ''The whole floor of the bus buckled.''
In Jerusalem, tens of thousands of Israelis attended a rally held by the hawkish opposition on Wednesday evening. Opposition leader Ariel Sharon, whose Sept. 28 visit to a contested Jerusalem shrine triggered the current round of Israeli-Palestinian fighting, said the government must take much harsher action.
''We have to stop twisting and turning. Arafat is not a partner. Arafat is a cruel enemy,'' Sharon said. ''It is not the people who are tired. It is this government which has gotten tired.''
Barak, who heads a minority government, faces a new challenge next week when parliament votes on a bill to hold early elections. Sharon's harsh criticism of the government suggested he was rebuffing Barak's new overtures for his faction to join the coalition.
Barak said responsibility for the attack lay with the Palestinian Authority which, he said, ''freed terrorists, members of Hamas and Islamic Jihad, and encourages and directs its people to carry out attacks.''
Arafat's Palestinian Authority said it had nothing to do with the bombing. ''We condemn in the strongest way the false accusations of the prime minister,'' Palestinian spokesman Marwan Kanafani said.
About 100 supporters of the Islamic militant group Hamas, which has carried out such attacks in the past, staged an impromptu march of celebration in the Gaza Strip after the blast. However, leaders of the group did not claim responsibility.
The explosion came several hours after Israeli troops tracking a local Palestinian militia commander linked to Arafat's Fatah movement opened fire on two cars in the Gaza Strip, killing four people, including the wanted commander, the army said.
Palestinians said the soldiers fired without provocation. The windshield of one of the cars was riddled with dozens of bullet holes. Mohammed Dahlan, a Palestinian security chief in Gaza, called the shooting a ''barbaric assassination.''
In all, more than 250 people have been killed in Israeli-Palestinian fighting in the past two months. Several days ago, there was a lull in the violence, as Arafat ordered gunmen to stop shooting at Israelis from Palestinians areas. It appeared that both sides were interested in a gradual return to negotiations.
However, bloodshed intensified again Monday when Palestinian militants carried out a deadly bomb attack on an Israeli school bus in Gaza. Israel rocketed Gaza in retaliation, killing two Palestinian policemen. In response, Egypt recalled its ambassador, sidelining itself as a mediator.
Wednesday's explosion and the expected Israeli retaliation further dampened prospects for a resumption of peace talks before President Clinton's term ends in January.
Israel has been on high alert for terror attacks by Palestinian militants since the recent violence began. In the past, the Islamic Jihad and Hamas groups have carried out car bombings in hopes of wrecking Israeli-Palestinian peacemaking.
On Nov. 2, two Israelis were killed in the packed Mahane Yehuda market in central Jerusalem when a car bomb exploded on a nearby side street. Islamic Jihad claimed responsibility for the attack.
In Hadera, six people were killed in a suicide bombing in 1994 that was claimed by Hamas. A string of bombings in Tel Aviv and Jerusalem in 1996 killed scores of Israelis.
