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Jerusalem, Thursday (AFP) Israelis and Palestinians suffered Wednesday one of the bloodiest days in their 32-month-old conflict, trading attacks that killed at least 24 people and left US-sponsored peace hopes in tatters.

A Palestinian suicide bomb from the Islamic group Hamas ripped through a Jerusalem bus, killing 16 people plus the bomber, police said.

An hour later Israeli attack helicopters rained missiles on a car in Gaza City, killing seven people, including two members of the military wing of Hamas, Palestinian sources said.

The tit-for-tat carnage came a day after a failed Israeli attempt to kill Abdul Aziz al-Rantissi, the political leader of Hamas, and put a new nail in prospects for negotiating a ceasefire.

The Ezzedin al-Qassam Brigades, the armed wing of Hamas, claimed responsibility for the mid-afternoon suicide bombing that gutted a bus on a bustling street in central-west Jerusalem.

Israeli television said the bomber, disguised as an ultra-Orthodox Jew, stepped on the number 14 bus at the Mahane Yehuda market on Jaffa street and set off an explosive device filled with bolts and nails.

"I saw a little girl crying for help and tried to pull her out of the bus. But then I saw a woman who had been turned into a human torch and I tried to put out the flames with an extinguisher," said Avi Failayer, whose hair salon lies just 20 metres (yards) down the street from the blast site.

"Two old men still sat on their chairs at the front of the bus, completely charred," he said, swallowing his tears after the worst suicide attack since 18 people died on a bus in Haifa on March 5.

The street, west Jerusalem's main thoroughfare, has been by hit several Palestinian suicide attacks since the start of the intifada, or uprising, against Israeli in September 2000.

Thirteen of the victims were killed on the spot while three more died of their wounds in hospital or on their way there, medical and police sources said. Scores of people were wounded, including four in critical condition.

Hamas published a statement on its website claiming responsibility for the attack, while a spokesman for the group said the bombing showed Palestinian groups could strike "when and where" they wanted.

The bomber's family identified him as an 18-year-old from the southern West Bank city of Hebron.

A short while later, seven Palestinians, including two members of Hamas' armed wing, were killed when two Israeli Apache helicopters attacked a car in Gaza City's eastern Shajayah neighborhood, Palestinian medical and security sources said. They said two members of the Ezzedin al-Qassam Brigades, Massud Tito and Soheil Abu Nahel, were among those killed. Two women were also killed and some 20 people wounded.

"Two missiles hit the car. I stopped my car to help them but the Israeli helicopters fired four more missiles at us," Mohammad, a Palestinian in his forties who was wounded in the attack, told AFP at a nearby hospital.

"When they took the bodies out of the car, I cannot tell you how they looked. It was terrifying," added Abu Raed Hmeid.

Israeli military sources said Massud was the "major figure" in Hamas' manufacturing of Qassam rockets and that Abu Nahel was a top bombmaker and a bodyguard for the movement's spiritual leader, Sheikh Ahmad Yassin. The attacks left all sides scrambling to patch up efforts to implement an international "roadmap" for peace providing for confidence-building measures ahead of establishment of a Palestinian state in 2005.

The process was formally launched at a summit last week in Jordan of US President George W. Bush, Israeli Prime Minister Ariel Sharon and his Palestinian counterpart Mahmud Abbas. Bush denounced the suicide bombing Wednesday in a brief statement to reporters and urged "all of the free world" to use "every ounce of their power" to prevent such attacks in the future.

He earlier had delivered a milder, but rare rebuke, to Israel, saying he was "troubled" by the helicopter gunship attack Tuesday on Rantissi that left two people dead and a later raid in Gaza which killed another three people.

Palestinian leader Yasser Arafat, in an unprecedented move for him, condemned the suicide attack as a "terrorist" act and urged all Palestinian factions to immediately cease military operations against Israel.

"I call on Palestinian factions to take their responsibilities and avoid taking the path on which Israel is trying to push them in order to destroy the roadmap," he told Palestinian television.

Abbas also called for a ceasefire, but Hamas immediately rejected the idea.

The suicide bombing came with Israel bracing for reprisals after its attack on Rantissi, which drew criticism from around the world as well as from the Israeli press and opposition groups.

Sharon vowed to press efforts to combat violence against the Jewish state but added in a televised speech that "we are going to continue the political process to ensure peace and security."

His spokesman Raanan Gissin said Israel was committed to peace "but this attack today is another grim reminder that without real concerted effort to stop terrorist activity, both people ... cannot move forward on the roadmap."

UN Secretary General Kofi Annan as well as European leaders sharply condemned the Jerusalem attack, but warned against it derailing the Middle East peace process.

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