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Emergency personnel work at the scene of an explosion at a money changer's shop in Tel Aviv on Thursday.
updated 12/11/2003 11:59:59 AM ET 2003-12-11T16:59:59

An explosion went off Thursday at a money changer’s shop in a crowded Tel Aviv business district, killing three people and wounding 12 in what police said may have been an attack by Israeli underworld figures.

The attack shook a nation already on edge over daily warnings about planned suicide bombings by Palestinian militants.

The blast went off as a suspected criminal boss, Zeev Rosenstein, entered the money changer’s shop, witnesses said. Rosenstein’s lawyer confirmed his client was present at the scene and was wounded.

Rosenstein was recently released from police interrogation. He had been taken into custody after a hit man reportedly claimed Rosenstein had ordered hits on some of his rivals. Police later said Rosenstein’s accuser was lying and released Rosenstein.

“We’re treating it less as a terrorist attack and more as a criminal attack,” said Israeli police spokesman Gil Kleiman. “It means that instead of looking for Palestinians, we’ll be looking for Israelis.”

The attack on the shop named Change occurred about 12:30 p.m. in a crowded business district during lunchtime, witnesses said.

Cars on both sides of the road were damaged.

“I was next to it, the whole window blew out,” an unnamed eye witness told Israel Radio.

The explosion, if criminal, would be one of the deadliest of its kind in the country’s history.

The last suicide bombing by Palestinian militants went off Oct. 4 in a restaurant in the northern Israeli city of Haifa and killed 21 people.

Palestinian PM warns Israel
Prior to the explosion, the Palestinian prime minister warned Israel against unilateral moves, such as seizing parts of the West Bank and Gaza Strip, saying they will never be accepted by the Palestinians.

“The fire will burn, the terror will grow,” he said in his sternest warning yet.

However, Israel’s leaders appeared increasingly determined to take action if peace talks fail, while insisting they will keep parts of the West Bank and Gaza Strip.

Deputy Prime Minister Ehud Olmert said Israel would dismantle “a considerable amount of settlements” in a unilateral pullback. “We are not far away from it,” Olmert told The Associated Press in an interview.

In violence Thursday, five Palestinians were killed as Israeli troops raiding a refugee camp met with stiff resistance. Palestinian sources said four of the dead were bystanders. Military sources said three militants were killed.

The fighting spread to a local cemetery, where militants and Israeli troops exchanged gunfire amid the tombstones, witnesses said.

Israeli Prime Minister Ariel Sharon and top members of his government repeatedly have said in recent days that they planned to take unilateral steps if efforts to implement the U.S.-backed “road map” fail.

Qureia’s comments marked the harshest Palestinian response yet to Sharon’s emerging plan. “It would be a terrible mistake to try to impose a solution on us by force,” Qureia said in an interview with the Maariv daily, excerpts of which were published Thursday.

Sharon and Olmert have said unilateral steps would include dismantling some Israeli settlements, but also have made clear that Israel would never withdraw from all the West Bank and Gaza Strip, to the frontier that existed before the 1967 Mideast war.

Barrier digs deep into West Bank
Even before Sharon floated the idea of unilateral steps, Israel began building a separation barrier that at points runs near the 1967 lines — known as the Green Line — but in other areas is to dip deep into the West Bank. The barrier is to keep out Palestinian militants who have killed hundreds of Israelis since 2000.

“If he (Sharon) wants to build a fence and use it to annex Palestinian land, this is unacceptable,” Qureia said.

“This will not help, this will not succeed, this will cause a disaster. You cannot build a fence on our land, to cage us like chickens and hope all will be well,” the prime minister told Maariv.

“If you want a fence, go ahead. Build it on the Green Line. In this instance we are prepared to contribute to the building costs. But to come and expropriate our land, to build the fence on Palestinian land, put us in cramped cages and then run away? We will never agree to this,” Qureia said.

Qureia, however, said he was confident he could reach an agreement with Sharon. “I believe it is possible. We have to return to the negotiating table immediately. We need to renew the trust,” he said.

But Olmert said Thursday that peace talks were certain to break down because the Palestinian Authority refused to crack down on militant groups, as required by the “road map” peace plan.

“If there is no agreement, I believe it is incumbent on Israel to take unilateral steps and to create a unilateral separation between us and the Palestinians,” he said.

Under his plan, Israel would rid itself of land comprising a large number of Palestinians, but would remain in areas essential for security, Olmert said, declining to elaborate.

5 killed in Israeli raid
In the Gaza Strip, Israeli troops raided the Rafah refugee camp early Thursday, killing five Palestinians and wounding 16, said Dr. Moawia Hassanain, a spokesman for the Palestinian Health Ministry.

Witnesses said troops had surrounded two houses, one belonging to a Hamas militant and the other a senior leader of the Islamic Jihad group.

Residents of one of the houses resisted and dozens of gunmen rushed to join the battle, firing at troops and throwing hand grenades, residents said. The army said its troops came under heavy fire from light weapons and anti-tank missiles.

Khaled al Kadi, the wanted Islamic Jihad militant, was arrested by the Israelis.

The Israeli commander of the operation, Col. Pinhas Zuaretz, said his troops did not enter the cemetery, “but at one stage, the terrorists trying to flee entered the cemetery and fired on the forces from behind the graves, and the troops returned fire.”

Several children were among the wounded, hospital officials said. Witnesses said students leaving their houses were caught in the cross fire.

Palestinian Cabinet minister Saeb Erekat condemned the raid.

“The Israeli policy of settlement expansion, building the wall, assassination and all the unilateral steps lead to one thing: enlarging the circle of violence,” he said.

Also, 11 Palestinians were arrested in overnight raids in the West Bank, the army said Thursday. Palestinian sources confirmed that 10 people were arrested, at least one of whom was a well-known militant.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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