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A bomb packed with nails exploded in a garbage can during morning rush hour today at a busy Tel Aviv intersection, injuring several people, including two children, police and radio reports said.

The blast at Allenby Street and Rothschild Boulevard shattered several windows and scattered debris over several blocks in a downtown area of discount clothing stores and small restaurants.

One woman suffered burns from the explosion, and several other people were treated for shock and minor injuries. Among those hurt were a toddler and a 4-year-old boy, radio reports said.

Prime Minister Benjamin Netanyahu, commenting on the attack, repeated his demand the Palestinian Authority in charge of self-rule areas in the West Bank and Gaza crack down on Muslim militants as a condition for moving forward in the stalled peace negotiations.

"We must deal with (terrorism) aggressively, as we have been doing," Netanyahu told reporters. "We also demand the Palestinian Authority fight terrorism."

Asked by Reuters about the Tel Aviv bomb, Palestinian President Yasser Arafat declined to comment.

Palestinian peace negotiator Hassan Asfour cautioned the Israeli government against premature finger-pointing.

"It is not unusual for Netanyahu's government to blame everything on Palestinians and the Arab world to hide its failure in the peace process," Asfour said.

Avi Cohen, 43, said he was arranging flowers in his flower shop when he heard the explosion. "The building shook. I rushed outside and found people lying on the ground," he said.

Israel radio said the bomb weighed 1 to 2 pounds and was studded with nails.

There was no claim of responsibility. However, both Tel Aviv police chief Shlomo Aronishki and Tel Aviv Mayor Roni Milo said they believed terrorists planted the bomb.

Muslim militant suicide bombers have struck several times in Tel Aviv since Israel and the Palestinians signed their first interim peace deal in 1993.

The blast today was the first such attack in Tel Aviv since March 1997.

Sheik Ahmed Yassin of the Islamic militant group Hamas told The Associated Press that he did not know who was responsible for today's bomb.

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