Israeli Prime Minister Benjamin Netanyahu
At least 10 people have been injured in an explosion on a bus in Israel's commercial capital, Tel Aviv.
One Israeli official said the blast, near the military headquarters, was a "terrorist attack".
The incident comes as Israel continues its strikes on Gaza, including on a key compound of the Hamas government, and militants fire more rockets at Israel, reports the BBC.
International efforts to broker a truce are continuing, with talks in the West Bank, Jerusalem and Cairo.
US Secretary of State Hillary Clinton and UN Secretary General Ban Ki-moon are in the region to discuss a ceasefire.
Israeli Prime Minister Benjamin Netanyahu's spokesman Ofir Gendelman said on his Twitter account that the explosion was caused by a bomb and that it was "terrorist attack".
Emergency services say three of the wounded in the bus explosion are in a serious condition.
The bus was reportedly passing the military headquarters in the city at the time of the blast.
Israel's Haaretz newspaper said the injured were being taken to Ichilov hospital.
Loudspeaker announcements in Gaza City said that Hamas, the militant Palestinian group that has run Gaza since 2007, had carried out the attack.
Hamas spokesman, Sami Abu Zuhri, told Reuters: "Hamas blesses the attack in Tel Aviv and sees it as a natural response to the Israeli massacres... in Gaza."
Celebratory gunfire reportedly rang out when local radio relayed news of the attack.
According to Israel's ministry of foreign affairs, the last bomb attack in Tel Aviv was in April 2006, when a suicide bombing on a restaurant killed 11.
The bus blast comes on the eighth day of exchanges between Israel and militants in Gaza.
Some 139 Palestinians and five Israelis have been killed.
The explosion will further complicate ceasefire discussions taking place in the region.
Mrs Clinton and Ban have been in the West Bank for talks with Palestinian Authority President Mahmoud Abbas.
The pair will later travel to Egypt, where they will meet Egyptian President Mohammed Mursi in the early afternoon local time.
Ban expressed "profound concern" at the civilian casualties in Gaza and also called on militants to end immediately their "indiscriminate attacks on Israeli population centres".
Officials from Hamas had suggested on Tuesday that a truce would come into effect at midnight, but Israel later said it had not agreed to a text.
Israel's demands include no hostile fire of any kind from Gaza and international efforts to prevent Hamas from re-arming, while Hamas is demanding an end to the blockade on Gaza and targeted killings by Israel.