Twenty one people were wounded by a bomb on a bus in Israel's commercial capital Tel Aviv on Wednesday. The bus was passing the military headquarters in the city at the time.
After the explosion, huge blasts were heard in the Gaza Strip as the Israeli bombardment of the Palestinian territory continued. More rockets were also fired at Israel.
Eleven people were killed in Gaza on Wednesday.
After eight days of exchanges of conflict, efforts are continuing to broker a truce between Israel and Hamas, which has governed Gaza since 2007.
According to the ministry of foreign affairs, the last such incident in Tel Aviv was in April 2006, when a suicide bomber on a restaurant killed 11.
Hamas praised the latest attack but has not said it was behind the blast. Celebratory gunfire rang out in Gaza City when radio stations reported the explosion.
The bomber boarded the bus and threw an explosive towards the rear, before getting off.
The Israel Defense Forces said 62 rockets fired by militants from Gaza had hit Israel so far on Wednesday, while another 20 were intercepted by its Iron Dome missile defence system.
The IDF also said it has attacked more than 100 sites in Gaza - about half of them underground rocket launchers.