There has been an explosion on a bus in Israel's commercial capital Tel Aviv, police say, amid continuing exchanges between Israel and militants in Gaza.
There are at least 10 injuries in what police called a "terrorist attack".
The incident comes as Israel continued its strikes on Gaza, including a key compound of the Hamas government, and militants fired more rockets at Israel.
International efforts to broker a truce are continuing with talks in the West Bank, Jerusalem and Cairo.
US Secretary of State Hillary Clinton and the UN secretary general are in the region to discuss a ceasefire.
Israeli Prime Minister Benjamin Netanyahu's spokesman Ofir Gendelman said on his Twitter account that the explosion was caused by a bomb and that it was "terrorist attack".
Emergency services say five of the wounded in the bus explosion are in a serious or moderate condition.
An Israeli who witnessed the explosion told Army Radio the bus was "completely charred".
Other witnesses were reported seeing a man leaving a bomb on the bus and then running off.
The bus was reportedly passing the military headquarters in the city at the time.
Israel's Haaretz newspaper said the injured were being taken to Ichilov hospital and that roadblocks had been set up in the area to search for a suspected bomber.
Loudspeaker announcements in Gaza City said that Hamas, the militant Palestinian group that has run Gaza since 2007, had carried out the attack.
Hamas spokesman Sami Abu Zuhri told Reuters: "Hamas blesses the attack in Tel Aviv and sees it as a natural response to the Israeli massacres... in Gaza."
Celebratory gunfire reportedly rang out when local radio relayed news of the attack.
It took place on the eighth day of exchanges between Israel and militants in Gaza.
Some 139 Palestinians and five Israelis have been killed.