An explosion on a bus near the defence ministry in Tel Aviv that injured at least 10 people has been praised from mosque loudspeakers in Gaza.
The blast took place as US Secretary of State Hillary Clinton was in Israel for talks with Prime Minister Benjamin Netanyahu on ways to end a deadly spike in bloodshed in and around Gaza over the past week.
"There are at least 10 people wounded of whom three are in serious condition," emergency services spokesman Zaki Heller told Israeli public radio.
Police said the blast took place on a street which runs just behind the Kiriya, Israel's sprawling defence ministry.
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"There was an apparent explosion on a bus in Shaul HaMelech Street in Tel Aviv. The background and circumstances are not clear yet," police spokeswoman Luba Samri told AFP.
TV images showed the bus with its windows blown out and its metal frame contorted from the force of the blast, in images reminiscent of scenes from the 2000-2005 Palestinian uprising.
The front window was completely shattered and glass littered the floor as the wounded were loaded into ambulances by an army of medics.
Netanyahu's spokesman said it was "a terrorist attack".
"A bomb exploded on a bus in central Tel Aviv. This was a terrorist attack. Most of the injured suffered only mild injuries," said Ofir Gendelman on his official Twitter account.
An Israeli driver who witnessed the explosion told Army Radio the bus was "completely charred inside". Another witness said there were few passengers on the bus when it exploded. The witnesses spoke to Israeli TV and were not identified.
Police spokesman Micky Rosenfeld said authorities were investigating whether the bomb had been planted and left on the bus or whether it was the work of a suicide bomber.
"We strongly believe that this was a terror attack," he said.
He said that of the 10 wounded, three were moderately-to-seriously hurt.
In Gaza, the Tel Aviv bombing was praised from mosque loudspeakers, while Hamas' television interviewed people praising the attack as a return of militants' trademark tactics.
There was no official comment from Hamas or Islamic Jihad.
