Yossi Sedbon, a police commander, said the bomber carried a medium-size bomb packed with nails and other shrapnel. Rescue workers said there were at least four bodies at the scene, one of them apparently the bomber, and that up to 46 people had been taken for treatment.

“It was an attack by a suicide bomber who blew himself up at the entrance of a pub called Mike’s Place near the US Embassy,” Mr Sedbon told Israel Radio.

The owner of the restaurant, Gal Ganzman, his shirt covered with blood, said that he was standing behind the bar when he heard the explosion. “I’m alive, I’m fine,” he said. “One of the waitresses lost an arm but she’s still alive. The boom was just outside the entrance. The security guard must have stopped him.”

A witness told Israel Radio: “We saw several young men, burned up, coming out of the pub.” The blast occurred near the site of the Dolphinarium nightclub bombing in June 2001 that killed 21 people, mostly Russian immigrants.

Immediate suspicion fell on militant groups opposing Mr Abbas’s threat to clamp down on them and the imminent publication of the “road map” for peace in the Middle East.

The peace plan, proposed by the United States, the United Nations, Russia and the European Union, envisages a provisional Palestinian state with temporary borders taking shape as early as this year. Israel is to dismantle illegal outposts and freeze settlement construction while Palestinians crack down on militants and collect illegal weapons.

Next year, intense talks would take place on the status of Jerusalem, Palestinian refugees and final borders.

Earlier, in Ramallah, on the West Bank, the Palestinian Legislative Council voted by 51 to 18 in favour of Mr Abbas’s Cabinet, with three abstentions. Observers saw the margin as a triumph for Mr Abbas, since it followed a protracted power struggle with Yassir Arafat, the Palestinian Authority leader.

Mr Abbas, also known as Abu Mazen, told the meeting: “Our main priority will be to restore law and order. There will be no illegal arms.”

Setting out his Government’s programme, Mr Abbas denounced “terrorism” and said that the armed struggle had failed to help the Palestinians to achieve an independent state.

Silvan Shalom, Israel’s Foreign Minister, welcoming the speech, said: “If Abu Mazen implements a policy of fighting terrorism, he will find in Israel a true partner for peace.”

However, Mr Abbas’s comments met with a withering response from Hamas and Islamic Jihad. “Of course we will not disarm,” Abdel Aziz al-Rantissi, a senior Hamas official, said. “We are resisting an occupation.” An activist in al-Aqsa Martyrs Brigades — linked to Mr Arafat’s Fatah movement — told The Times: “They will never disarm us because we are like sons to Arafat. If Abu Mazen makes too many concessions, he knows what his fate will be.”

Mr Arafat had objected to plans to dismantle al-Aqsa Brigades and to confront other groups, but he backed down under international pressure.

Israel has accused Mr Arafat of refusing to leave his headquarters in Ramallah because while there he is affording protection to about 200 wanted militants. Yesterday Palestinian sources confirmed that al-Aqsa Brigades members were being given protection.

In Bethlehem Israeli troops shot dead two men said to have belonged to al-Aqsa Brigades. In Khan Younis, in the Gaza Strip, two others, said to be members of the Popular Front for the Liberation of Palestine, were killed when four missiles from an Apache helicopter struck a car. Two Palestinians were killed later trying to enter an illegal Israeli settlement on the West Bank.

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