The bombing, the first inside Israel since January, occurred about 8:45 a.m. on a busy street of high-rise offices next to the diamond exchange in Ramat Gan.

The explosion ripped through the middle of the blue-and-white municipal bus, shredding some bodies into unrecognizable fragments.

An angry crowd gathered outside the police lines, where people chanted slogans against the peace negotiations and jeered senior Israeli officials, including Prime Minister Yitzhak Rabin, who came to inspect the damage.

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A caller to Israeli radio said the Islamic Resistance Movement, also known as Hamas, had carried out the attack, which also injured 33 people, three critically.

The extent of the damage to the Israeli-Palestinian peace process was not immediately clear.

Even before Monday’s attack, negotiators for both sides had said they would miss their self-imposed deadline of Tuesday for agreeing on the next phase of their 1993 peace accord, expansion of Palestinian authority in the Israeli-occupied West Bank.

Opponents of the peace process, especially Jewish settlers in the West Bank and their allies in the Israeli parliament, are sure to cite the attack as more evidence for their claim that Israel is sacrificing its security by opening the door to a Palestinian state.

Israeli President Ezer Weizman, a Labor Party ally of Rabin, said the peace negotiations should be reconsidered in light of Monday’s bombing.

Rabin reacted by ordering the border between Israel and the occupied territories closed to Palestinian traffic, which is standard practice after such attacks and has the effect of keeping many Palestinians from their jobs.

But he said the closure would be of limited duration and he made an effort to limit the damage to the peace process, telling members of his Labor Party coalition that negotiations will resume after funerals for the victims.

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Rabin blamed extreme Islamic terror groups for the attack bus said, We will continue the talks. We are determined to talk with those who don’t carry out or want the attacks.

While the peace process has enemies on the Palestinian side, Rabin said, we also have partners on the Palestinian side something we never had in the past.

Palestinian leader Yasser Arafat, who until recently has been accused of passivity toward the extremists, condemned the bombing in unusually strong terms.

I’m sorry that we had this meeting while there are terrorist activities which I condemn completely, and I’m sending my condolences to the families of the victims, he said in remarks quoted by the Associated Press.