The force of the blast blew out windows and damaged parked cars | Israel has accused Iran and Syria of complicity in a suicide attack that injured at least 30 people in Tel Aviv.
It "was financed by Tehran, planned in Syria and carried out by Palestinians," Defence Minister Shaul Mofaz was quoted by security officials as saying.
Mr Mofaz was also quoted as blaming the attack on "the axis of terror that operates between Iran and Syria".
Palestinian militant group Islamic Jihad earlier said it carried out the attack near Tel Aviv's old bus station.
Palestinian President Mahmoud Abbas and the US have condemned the bombing.
It was the first bomb attack in Tel Aviv since February last year.
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SUICIDE ATTACKS IN ISRAEL 19 Jan: 30 injured, Tel Aviv 5 Dec 2005: Five die, Netanya 26 Oct: Six die, Hadera market 28 Aug: 20 hurt, Beersheba 12 July: Two die, Netanya 25 Feb: Five die, 50 hurt, outside Tel Aviv nightclub |
Israeli newspaper Haaretz quoted Mr Mofaz as saying that Israel had "decisive proof" the Tel Aviv attack could be blamed on the "axis of terror".
"Iran supplied the money, and [Islamic] Jihad's headquarters in Damascus directed the organisation's operatives in Nablus, giving operational orders and instructions," Mr Mofaz reportedly said.
Israel's Army Radio said the minister had shared the evidence with officials in the US, Europe and Egypt.
A spokesman for the Islamic Jihad's military wing - al-Quds Brigades - earlier named the bomber as 22-year-old Sami Abd al-Hafiz Antar, from the West Bank town of Nablus.
A top official in the Israeli foreign ministry, Gideon Meir, said on Thursday the attack highlighted the consequences of the Palestinian government's failure to disarm militant groups.
Mr Abbas said the bombing was meant to derail the Palestinian legislative elections on Wednesday, which Islamic Jihad is boycotting.
"This is sabotage and aimed at sabotaging the elections, not only the elections, but also the security of Palestinians. The culprits must be punished." the Palestinian leader said.
'Swayed strangely'
The attack took place at about 1530 (1330 GMT) on Solomon Street in Tel Aviv's commercial district.
"The guy was standing at the corner of the street, looking like he was waiting for someone," Yehiel Ohana told the Associated Press news agency.
"He swayed strangely. Then he went into the shwarma (food) stand, and two to three seconds later, we heard the explosion. Everything shuddered," he said.
"We entered the shwarma stand, and we saw him lying on the floor, and then we understood he was a suicide bomber."
The bombing took place on the same day as Iranian President Mahmoud Ahmadinejad began two-day talks with Syrian counterpart Bashar al-Assad in Damascus, in what Mr Mofaz described as a "terror summit".
It was the first suicide attack in Israel since 5 December, when five Israelis were killed by a suicide bomber outside a shopping centre in Netanya.
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