Hamas claimed responsibility for the bus bombing, which left charred remains -- including a child's drawing of two hearts in crayon -- across a highway. The attack, at the Meron Junction near the town of Tsfat, was the militant group's second deadly bombing in five days.

Altogether, two bombings and three shootings Sunday left 14 people dead and dozens wounded. Among the dead were three Palestinian militants who died carrying out -- or preparing to carry out -- the violence, Israeli officials said.

The bloodshed continued after midnight. Palestinians opened fire on a car in the West Bank, killing an Israeli couple and wounding two of their children, the military said. The ambush took place on the main road through the West Bank, between Ramallah and Nablus.

Israel's military clampdown on the West Bank has kept many Palestinians confined to their homes for most of the past six weeks, but militants continue to elude the troops to carry out attacks.

"People lucky enough not to face the ugly face of terror can have a much more relaxed opinion about it," said Israeli Foreign Minister Shimon Peres. "If you live through a day like today, in this country, you can understand our determination."

President Bush said he was "distressed" to learn of the bus bombing. "There are a few killers who want to stop the peace process," Bush said as he began a daybreak golf game with his father in Kennebunkport, Maine.

The Israeli government said Palestinian leader Yasser Arafat, who turned 73 on Sunday, bore ultimate responsibility for not reining in militants during the 22 months of Mideast fighting.

"This Palestinian terror must be uprooted and Israel will not relent," said David Baker, an official from Prime Minister Ariel Sharon's office.

The Palestinian leadership condemned the bombing, but also accused Sharon of "war crimes" for the Israeli army's mass detentions, home demolitions and curfews imposed on Palestinians.

Israeli officials had said high-level talks between Sharon and Palestinian Cabinet ministers could be expected later this week, but it was unclear whether the meetings would go ahead as planned after Sunday's attacks.

Hamas said the bus bombing was the second retaliatory strike for Israel's July 22 air strike that killed a senior Hamas leader, Salah Shehadeh, and 14 others in Gaza City. Hamas also carried out a Wednesday bombing at Jerusalem's Hebrew University that killed seven, including five Americans.

United Nations Secretary-General Kofi Annan denounced the bombing, calling it immoral and politically counter-productive. "We must escape from this endless downward spiral," Annan said in a statement.

About 1,500 people celebrated the bus bombing in Gaza City late Sunday, passing out sweets and praying near Shehadeh's destroyed house, where militants shouting over loudspeakers vowed to "avenge every drop of his blood."

Three hours after Sunday's bus bombing, a Palestinian attacker opened fire just outside the stone walls of Jerusalem's Old City, sparking a gun battle with police that left three dead.

The Palestinian gunman used a pistol to fire at close range on a truck belonging to Israel's main phone company, Bezeq. A security guard was killed and the driver was injured, police said.

Seconds later, Israeli police began firing. The gunman was killed by police, and an Arab bystander was hit and killed by cross fire, Israeli officials said. More than a dozen people were hurt, most of them Palestinians, in the shooting near the Damascus Gate entrance to the Old City.

The Al Aqsa Martyrs Brigades, whose members are loyal to Arafat, claimed responsibility.

The stepped-up Israeli military effort has included house-to-house searches for the past three days in Nablus, the West Bank city Israel now describes as the main center for Palestinian suicide bombers.

Israel also blew up nine Palestinian homes Sunday in the West Bank, all of them belonging to militants who carried out or orchestrated previous attacks. Israel is hoping the practice will discourage would-be assailants who want to spare their families from harm.

However, the only tangible result to date is that militant groups have stopped announcing the names of attackers and releasing their homemade videos, making it a bit more difficult for Israel to track down the families.

The bombing at Meron Junction in the Galilee region of northern Israel turned the packed green bus into a fireball, charring the insides and ripping the metal panels as if they were ribbons.

"All repressive security measures will not prevent painful strikes against the (Israeli) occupation," Hamas said in a statement on its Web site.

The bus was filled with both civilians and soldiers heading back to their bases Sunday, the beginning of the Israeli work week. The nine passengers killed included three Israeli soldiers, two women from the Philippines and four Israeli civilians -- including one Arab Israeli woman, authorities said. Thirty-seven people were injured, two critically, rescue workers said.

The bomber apparently warned two Arab students of the impending attack, and they got off the bus shortly before it blew up, a police source said. The two students have been detained, the source added.

Chaim Itzkovitch, 50, was just leaving his house for work early Sunday morning when "I heard a big bomb and I could see flames in the air."

"There was a lot of screaming, horrible screaming inside the bus," said Avraham Freed, who owns a restaurant near the blast site. "I saw one person on the ground next to the bus -- bodies, parts of bodies, people jumping through the windows."

Hours later, police and ultra-Orthodox Jewish volunteers were still picking through the debris to collect remains for burial and evidence for the investigation.

The bus driver, Shmuel Ronen, escaped with light wounds -- just as he did six years ago when the bus he was driving in Jerusalem was bombed.

In other violence Sunday: