An 18-year-old Palestinian blew himself up among teenage Israelis at a busy junction outside a shopping centre in southern Israel today, killing two other people and injuring dozens of passers-by.

Israeli police identified the bomber as a member of Islamic Jihad from the West Bank village of Atil, about eight miles to the east of Netanya, the scene of today’s attack.

Islamic Jihad carried out the last suicide bombing in Israel, killing five people outside a Tel Aviv nightclub on February 25, but had since agreed to follow a “period of calm” to the end of the year.

The explosion went off shortly before 7pm (1600 GMT) near the Sharon Mall in Netanya. Officers have linked the attack near the centre and a car bomb explosion about 30 minutes earlier in the Jewish settlement of Shavei Shomron in the West Bank, which has also been linked to Islamic Jihad. One suspect has been arrested.

About 30 other people were wounded in the Netanya attack, three seriously. Bloodied clothes were strewn on the asphalt, and the body of a woman was sprawled in the street. Several of the wounded were rolled away on stretchers.

Shaul Mofaz, the Israeli Defence Minister, convened senior army officers after the bombing, but any retaliation could be limited as both sides have an interest in not walking away from their agreement.

Ariel Sharon, the Israeli Prime Minister, needs to maintain calm to carry out his Gaza withdrawal this summer, and the political survival of Mahmoud Abbas, the Palestinian Prime Minister, depends on keeping the ceasefire alive.

Israel is planning to begin removing all its soldiers and 8,000 Jewish settlers from 21 settlements in Gaza and four small enclaves in the northern West Bank from August 17.

The Palestinian Authority condemned the latest bombing. “All factions must abide by the truce,” said Jibril Rajoub, a security aide to Mr Abbas.“These acts only cause harm to Palestinian unity and serve the right wing in Israel.”

Netanya has often been a target of Palestinian bombers, but the frequency has dropped sharply in the past year after the West Bank security barrier was completed.

The Netanya shopping mall has been a terrorist target in the past: on May 18, 2001, a bomber blew himself up there, killing five Israelis and the centre is a few hundred metres from the Park Hotel, scene of the deadliest bombing of the intifada, which killed 30 people in March 2002 and prompted a massive Israeli offensive. The last suicide bombing in Netanya was on May 19, 2002, when three Israelis were killed on a street.

The attacks within Israel came as senior Palestinian and Israeli officials were in London to pay their respects to the victims of the terrorist bombings.

Saeb Erekat., the Chief Palestinian negotiator, visited the garden of remembrance at King’s Cross station, where many of the commuters who died caught the Tube trains that were targeted in the co-ordinated attacks that have claimed at least 52 lives.

The area was searched with sniffer dogs prior to his visit and no members of the public were inside as he laid a wreath of yellow lilies.

After his visit, Dr Erekat said: "We condemn this massive terrorist act. We offer our condolences to the British people, the British Government, and we really hope for the speedy recovery of those wounded people." He said the attacks were a crime and he did not believe they had any connection with Islam.

Minutes after Dr Erekat left, a cross-party delegation from the Israeli Parliament arrived, also amid heavy security. The group of more than 20 people are in London for talks with a Palestinian organisation. The delegation - including several members of the Israeli parliament, the Knesset - laid a wreath in the small garden, with ribbons proclaiming it was from "The Knesset Israel Parliament".

A 39-year-old Israeli woman who had a fear of bus bombs in her home country was on one the targets of the London bombers, the Number 30 bus, moments before it exploded and is feared dead, her fiancee said.

Anat Rosenberg, who had lived in London for 18 years, called her partner John Falding after emerging from the London Underground to tell him she had just taken the bus and was lucky enough to find a seat.

Times Recommends

• 'Radio Rancid' is scourge of Obama
• French gulp as global warming alters wines
• Colton, the barefoot boy bandit, outfoxes sheriffs