Israelis have come under renewed attack by suspected Palestinian militants with a suicide bombing in Jerusalem and an ambush of Jewish settlers in the West Bank.

The suicide bomber wounded at least four others when he blew himself up in a fast-food shop on a busy street in the first such attack in the city in nearly six weeks.

In another incident, suspected Palestinian gunmen shot dead two Jewish settlers near Nablus, in the northern West Bank.

Earlier on Tuesday, Israeli soldiers killed a knife-wielding Palestinian in the West Bank settlement of Itamar near Nablus, the army said.

The man had got into a home and wounded a settler and his wife, before security forces were alerted and shot the attacker.

Israel has been on a high alert since its forces killed a leading member of the militant Palestinian group Hamas in the Gaza Strip last week.

Fourteen civilians - many of them children - also died in the air strike on a residential area. Hamas promised revenge attacks.

Premature detonation

Tuesday's explosion was the first suicide bombing in Jerusalem since a pair of attacks in mid-June killed 26 Israelis and prompted the army to occupy seven of the eight major West Bank towns.

Palestinian terror is aiming to instill a perpetual state of fear in Israelis

Israeli spokesman

Jerusalem Police Chief Mickey Levy said the bomber entered a felafel shop and detonated the bomb.

However the device appeared to have gone off prematurely, and some reports say this is possibly why there were relatively few casualties.

Most of the injured suffered from shrapnel wounds, Israeli public television said.

The blast, near King George Street, occurred in one of the most heavily guarded areas of the city centre which divides traditionally Arab east Jerusalem from west Jerusalem, the Associated Press news agency said.

An official in the office of Prime Minister Ariel Sharon, David Baker, condemned the bombing, saying it was proof that the Palestinian Authority "continues to believe that terror will further its goals and this is mistaken".

Israel has blamed Palestinian leader Yasser Arafat for attacks on its civilians, and accuses the Palestinian Authority of doing nothing to stop militant groups.

However the Palestinians argue that Israel's military assaults on its cities and security forces have left them with little ability to prevent attack

Settlers targeted

Earlier on Tuesday, two settlers were shot dead in the West Bank as they drove through the Palestinian village of Jammaien.

The Jerusalem bomb wounded at least seven people

Witnesses said two masked Palestinian gunmen were lying in ambush for the settlers who, it is thought, had gone to the village to deliver diesel fuel to a factory.

The army said troops were searching for the gunmen.

The BBC's Claire Marshall in Jerusalem says that despite the ongoing conflict, business contacts are often maintained between individual settlers and local Palestinians.

According to a statement sent to the French news agency AFP, the Al-Aqsa Martyrs Brigades - an armed offshoot Yasser Arafat's Fatah movement - said it carried out the ambush.

Jewish settlers have frequently been targeted by Palestinians during the 22-month intifada.

Israeli settlements on occupied land are illegal under international law.