TEL AVIV, Israel (AP) -- A bomb struck an Israeli bus near the nation's military headquarters in Tel Aviv on Wednesday, wounding 10 people and complicating major diplomatic efforts to forge a truce between Israel and Gaza's militant Hamas rulers.
The attack came as U.S. Secretary of State Hillary Rodham Clinton shuttled between Jerusalem and the West Bank to help piece together a deal to end Israel's weeklong offensive against Palestinian militants in the Gaza Strip that has killed more than 130 Palestinians. Militant rocket fire into Israel has killed five Israelis. Clinton was due to travel later to Egypt, which is mediating in the crisis.
"What does it say about the future of the (truce) talks? I leave it to (the senior officials), but this doesn't add anything," Yitzhak Aharonovich, Israel's minister of internal security, told Army Radio.
The bus exploded around noon on one of the coastal city's busiest arteries, near the Tel Aviv museum, the district courthouse and across from an entrance to Israel's national defense headquarters.
The bus was completely charred, its side windows blown out and glass scattered on the asphalt. The wounded were evacuated and blood was splattered on the sidewalk.
"We suddenly heard a huge explosion and immediately knew it was a terror attack," said Nir Zano, 35. "I saw someone running in to carry out a woman who was injured."
Aharonovitch said the device was placed inside the bus by a man who then disembarked. The explosion took place while the bus was in movement, he said.
Police set up roadblocks across the city trying to apprehend the attacker.
"We strongly believe that this was a terror attack," said police spokesman Micky Rosenfeld. He said three of the 10 wounded were moderately to seriously hurt.
In Gaza, the Tel Aviv bombing was praised from mosque loudspeakers, while Hamas' television interviewed people praising the attack as a return of militants' trademark tactics.
No group claimed responsibility for the attack, but Hamas spokesman Fawzi Barhoum welcomed it.
"We consider it a natural response to the occupation crimes and the ongoing massacres against civilians in the Gaza Strip," he told The Associated Press.
Israeli Deputy Prime Minister Silvan Shalom, who heard the explosion from his Tel Aviv office, called it "an escalation."
The cease-fire efforts come with thousands of Israeli ground troops massed on the Gaza border, awaiting a possible order to invade.
After meeting with Israeli Prime Minister Benjamin Netanyahu in Jerusalem Tuesday night, Clinton conferred with Palestinian President Mahmoud Abbas in the West Bank on Wednesday morning and was due to travel later to Cairo, which is mediating in the crisis.
The two sides had seemed on the brink of a deal Tuesday following a swirl of diplomatic activity also involving U.N. chief Ban Ki-moon and Egypt's President Mohammed Morsi. But sticking points could not be resolved as talks - and violence - stretched into the night.
Israeli aircraft pounded Gaza with at least 30 strikes overnight, hitting government ministries, smuggling tunnels, a banker's empty villa and a Hamas-linked media office.
Dozens of civilians are among the more than 130 Palestinians killed in a week of fighting. Four Israeli civilians and a soldier have been killed by rocket fire - a toll possibly kept down by a U.S.-funded rocket defense system that has shot down hundreds of Gaza projectiles.
The Tel Aviv bus bombed Wednesday was relatively empty during the explosion, which explains the relatively low number of casualties. The bombing was the first in the coastal city since April 2006, when a Palestinian suicide bomber killed 11 people at a sandwich stand near the city's old central bus station. A bomb left at a bus stand in Jerusalem last year killed one person.
More than 1,000 Israelis were killed during the violent Palestinian uprising in the last decade in bombings and shooting attacks. More than 5,000 Palestinians were killed as well.