Israel is planning a "harsh, precise response" to Monday's deadly bomb attack on a bus by Palestinian militants which killed 14 people, Interior Minister Eli Yishai has said.

But according to Mr Yishai, the strength of the response will be limited to take into account America's interests as it gears up for a possible war with Iraq.

If the Americans attack Iraq, it's in our interest as well as that of the Americans

Interior Minister Eli Yishai

In the immediate aftermath of Monday's attack, Israeli Prime Minister Ariel Sharon did not hold an emergency cabinet meeting to plan retaliation - his usual response to such an attack.

Instead, he told the Defence Minister, Binyamin Ben-Eliezer, to take action as he saw fit.

Israeli troops subsequently demolished the West Bank homes of two Palestinians allegedly involved in other bombings, but the operation fell well short of the massive military response to other attacks on Israelis.

Joint interests

Mr Yishai said that if the Israeli Government retaliated immediately with great force, "we could cause difficulties for the Americans".

"Although I think that an extensive operation should also be considered, at the same time a harsh, precise response must be carried out," he told Israeli army radio.

The bus attack occurred near the town of Hadera

"If the Americans attack Iraq, it's in our interest as well as that of the Americans," Mr Yishai added.

The BBC's Middle East Analyst Roger Hardy says that Mr Sharon is under pressure from the United States to reduce Israeli-Palestinian violence. As Washington seeks Arab support for possible military action against Iraq, it wants Israel to ease restrictions in Palestinian areas.

Senior US envoy William Burns is due in Israel on Wednesday to brief Israeli and Palestinian officials on a US "road map" designed to lead in three stages from a cessation of violence to the creation of a Palestinian state.

Arafat blamed

The Israeli Government has blamed Yasser Arafat's Palestinian Authority for Monday's bombing of the bus near the town of Hadera, which killed 14 people plus the two bombers, and injured more than 40.

Police say the bus burst into flames after a jeep packed with explosives pulled up next to it.

Mr Arafat condemned the bombing, which the militant Palestinian group Islamic Jihad said it had carried out.

The United Nations Secretary General, Kofi Annan, said he was "appalled" by the attack.

It was the deadliest attack inside Israel since 18 June, when a bus bomber killed 19 passengers in Jerusalem.

That bombing triggered a sweeping Israeli reoccupation of the West Bank, which remains in force.