Israel is to freeze plans to lift some restrictions on Palestinians following Wednesday's double suicide bomb attack in Tel Aviv that killed three bystanders and injured about 40 others.

Palestinian terror is continuing to perpetuate the suffering

Israeli defence ministry

The unspecified plans, authorised hours before the attacks, were meant to free up trade and industry within occupied towns of the West Bank.

Israel blamed Yasser Arafat's Palestinian Authority for the explosion, but aides to the Palestinian leader denied this, saying such operations put their people's national interests at risk.

US President George W Bush has described the attacks as "despicable" and said that they were also "attacks on our efforts to restore hope to the Palestinian people".

He is due to meet the foreign ministers of Egypt, Jordan and Saudi Arabia in Washington later on Thursday, in an effort to secure their backing for implementation of a Middle East peace plan.

Officials say the Arab ministers are being briefed on new security arrangements being worked out by the CIA to curb the continuing violence in the region.

The three moderate states have indicated readiness to work with US on measures aimed at reforming Palestinian institutions.

'Determined to murder'

"This attack in Tel Aviv proves that Palestinian terrorists are determined to murder, maim and terrorise as many Israelis as they can, thinking that by doing so they can pressure Israel into concessions," said David Baker, spokesman for Israeli Prime Minister Ariel Sharon.

Soon afterwards, a statement from Defence Minister Binyamin Ben-Eliezer said he had ordered "for the meantime, the freezing of the alleviation measures that were authorised... in the sphere of trade and industry for the Palestinian population".

Relatives mourn victims of the settlement massacre

"Israel is striving to ease the conditions as much as possible for the broader Palestinian population but the Palestinian terror is continuing to perpetuate the suffering [of the population]," the statement said.

The BBC's correspondent in Jerusalem, Paul Wood, says that before this attack many Israelis had been starting to feel more confident about the safety of their streets after almost a month of calm inside Israel.

Only a few days ago the army had declared that its massive operations were working.

But now the Israeli security cabinet is due to meet to decide how to step up military action once again.

Foreign workers targeted?

The explosions occurred about 15 metres apart in Neve Shaanan Street, an area crowded with small shops and stalls close to the old Tel Aviv bus station.

The run-down area is known for its large number of foreign workers and at least one of the dead is a foreigner, police said.

The suicide bombings came only a day after Palestinian gunmen attacked a West Bank Jewish settlement, leaving eight Israelis dead.

That was the deadliest attack against Israel since troops pushed into Palestinian-ruled territories across the West Bank after two suicide bombings in Jerusalem killed 26 Israelis in June.