A suicide bomber killed himself and three Israelis in an explosion that rocked the heart of the Israeli coastal city of Netanya on Sunday, a day after Islamic militants vowed to launch fresh attacks.
Angry Israelis tried to lynch an Arab, seriously wounding the man, in the same city following the attack.
Police said the Israelis killed when the bomber detonated explosives at a street crossing were an 84-year-old man and two women, one a 70-year-old immigrant from Ukraine. At least 68 people were wounded.
The local police chief said after the explosion a number of Arabs fled to the market where some tried to attack them.
Police arriving swiftly at the scene managed to prevent a lynching. There is no suggestion that any of those attacked were linked to the bombing.
Hours later, no claim of responsibility had been made for the blast, not far from the site of an explosion on New Year's Day which wounded dozens of people and for which the militant Islamic group Hamas claimed responsibility.
Hamas officials said they did not know who caused Sunday's explosion.
The suicide bombing was the latest fatal attack in a five-month-old Palestinian revolt against Israeli occupation and took the number of Israelis killed to 65. A total of 341 Palestinians and 13 Israeli Arabs have also died.
Arafat not trying to prevent attacks - Sharon
Israeli Prime Minister-elect Ariel Sharon, speaking to reporters, accused Yasser Arafat's Palestinian Authority of doing nothing to prevent attacks.
"This attack...shows the Palestinian Authority is not taking the required steps. We know clearly that forces particularly loyal to Mr Arafat are taking part in these attacks," he said. "It's clear they are not taking any steps to prevent it."
Sharon, who is forming a broad-based "unity government", said it would restore security to Israelis.
Sunday's attack was the third blast in 16 months in Netanya, only 16 km (10 miles) from the West Bank, and the most serious in Israel since a Palestinian driver smashed his bus into a crowd of Israeli soldiers and commuters at a bus stop in the central Israel town of Azur on February 14, killing eight.
Hamas has taken responsibility for years of suicide attacks in which scores of Israelis have been killed or wounded.
Lynching victim in serious condition
Hospital officials said the condition of the unidentified Palestinian attacked in Netanya in what police called a lynching improved to serious from critical.
Police arrested one person and said they were hunting for three others after the assault, which came after local Arabs fearing attack after the explosion fled into a market.
Sharon called for restraint and urged people not to take the law into their own hands.
Late on Sunday, a local court imposed a gag order on details of the suicide bomber and the bombing, which occurred only hours after Hamas said in a leaflet that 10 suicide bombers from its military wing were poised to attack once Sharon took office.
Sharon, leader of the right-wing Likud Party, has been locked in negotiations with other parties and could form the coalition as early as this week.
Danny Haddad, assistant commander of police operations in central Israel, said that even before Hamas issued its statement on Saturday, police had decided to reinforce the West Bank border as well as potential targets in towns and cities.
Asked if every street, shopping mall, bus stop and soldiers' hitchhiking post might be a target, Haddad told Israeli Army radio: "Indeed, that's right, and as a result of that, we will widen our presence in all the places you mentioned."
In the West Bank city of Nablus, more than 6,000 Palestinians took part in the funeral procession of Baher Audi, 20, and Ahmed Allah, 25, both killed on Saturday.
"Netanya's operation shows that we can take revenge on them (Israelis)," said Salah Abu Nour, 35. "Today we buried two Palestinians killed by the Israeli army and Jewish settlers. What do you expect?"
Palestinian security sources said Audi was shot dead by Israeli troops. Local witnesses said soldiers entered the town of Hawarreh and shot at a group of boys. The army said it shot one Palestinian dead and wounded another during clashes with stone-throwers.
Ahmed Allah's brother Mohammed said his brother was killed on his return from Ramallah where he had gone to look for a job. He blamed settlers from a nearby Jewish settlement.
At a village near Jenin in the West Bank, a Palestinian assailant killed a 43-year-old Israeli Arab who was accused of working as a collaborator for Israel, Palestinians said.