A suicide bomber in a bus in central Jerusalem killed at least 16 people, while seven Palestinians were killed in Gaza in an Israeli helicopter attack that apparently targeted a senior member of the Hamas militant outfit.

The attack took place in the vicinity of the 'Klal' building on Jaffa Street, close to the intersection with King George Street, the site of many suicide explosions in the past, Israeli radio and TV reports said.

Hamas has claimed responsibility for the suicide bombing in its website, but Israel denied it was a tit-for-tat for Tuesday's assassination attempt against a senior Hamas leader Abdel Aziz Rantisi.

The assassination attempt was itself a tit-for-tat retaliation for the killing of four Israeli soldiers by the militant outfit.

An hour after the suicide attack, an Israeli helicopter fired two missiles at a car in Gaza city targeting Tito Massoud, described as a commander of Hamas,

Seven people, including two members of the armed wing of Hamas, died in the attack.   

The recent cycle of violence puts on backburner the peace process that was renewed after Isareli and Palestinian prime ministers held a three-way summit with United States President George Bush.