Israel has signalled that a deadly bus bombing by a Palestinian militant in Jerusalem on Tuesday will set back US plans to end nearly two years of violence.

The rush-hour blast, which killed 19 Israelis and injured over 50 others, came as President Bush prepared to announce a new blueprint for peace in the Middle East, possibly including the setting up of a Palestinian state.

If President Bush makes a mention of a future Palestinian state, this will be a clear contribution to future terrorism

Uzi Landau, Israeli Internal Security Minister

Israeli tanks rolled into the West Bank city of Jenin, an hour after a special cabinet meeting convened by Israeli Prime Minister Ariel Sharon ended.

Palestinian sources said helicopter gunships had also been in action over the town. Palestinian gunmen are reported to have shot at the tanks.

The Israeli army has not confirmed the report, but correspondents say the mini-cabinet was widely expected to authorise some kind of retaliation for the suicide attack.

Bush 'vision'

Speaking at the scene of the attack in southern Jerusalem, Israeli Prime Minister Ariel Sharon said the bombing was an argument "stronger than any words" against Palestinian statehood.

	Jerusalem in firing line: March 2002: 11 dead in attack on busy cafe December 2001: 12 killed in shopping centre August 2001: 15 killed, 90 injured in attack on restaurant July 1997: 18 killed in Mahane Yehuda market March 1996: Bus bomb kills 19 Click here for full history of bomb blasts

"It is interesting to know what kind of Palestinian state they are talking about," he added, apparently referring to the American plan.

The White House said President Bush condemned "this act of terrorism [in Jerusalem] in the strongest possible terms".

There has been growing anticipation that Mr Bush would deliver a major speech early this week outlining the US vision for resolving the conflict.

Media reports suggest the announcement would call for an interim Palestinian state and a Middle East peace conference.

White House spokesman Scott McClellan said Mr Bush would not deliver his address on Tuesday, but denied it had been delayed by the Jerusalem bombing.

"When the president has something to say, he will do so," he told reporters.

Recriminations

The Israeli Government blamed the Palestinian Authority for Tuesday's attack, saying it should serve as a lesson for President Bush.

Israel will use this operation to escalate its aggression against the Palestinian Authority

Abed Rabbo, Palestinian minister

"If President Bush makes a mention of a future Palestinian state, this will be a clear contribution to future terrorism," said Israeli Internal Security Minister Uzi Landau.

Israeli Government spokesman Arieh Mekel warned that Palestinian "aspirations of a state are getting further and further away".

The Palestinian Authority condemned the bus bombing, saying Israel would use it as a pretext launch a military action.

"The only beneficiary of this [bombing] is Sharon and the occupation. Israel will use this operation to escalate its aggression against the Palestinian Authority," Palestinian Information Minister Abed Rabbo told French news agency AFP.

Ramallah in fear

The BBC's Caroline Hawley, who is in Ramallah, says there has been no word so far from the Palestinian leader himself, although one of his bodyguards described him as tired and worried.

There is fear in Ramallah, she says, that the Israeli army may return.

Pharmacies and grocers report increased sales, as Palestinians stock up in preparation for the worst.

Food, water and medicines have been taken into Mr Arafat's headquarters, and a group of international peace activists has also gone in, saying they want to try to protect the Palestinians inside.

Meanwhile in Hebron, Israeli commandos are reported to have killed a member of the military wing of the radical Islamic Jihad group.

Yussef Bisharat, 22, was gunned down in his car at an army roadblock at the northern entrance to the city, according to a Jihad spokesman quoted by AFP.

Massive blast

The early morning attack was the deadliest of its kind in Jerusalem since February 1996, when 26 people were killed in a bus explosion.

Hamas said one of its members carried out the attack

The bus was full of schoolchildren and office workers when the bomber detonated nail-studded explosives.

"There was a huge explosion, smoke and pieces of the bus and body parts were flying everywhere. It was horrible," a witness told Israeli radio.

Islamic militant group Hamas said one of its members, 22-year-old Mohammed al-Ghoul from the al-Faraa refugee camp in the West Bank, carried out the attack.