Palestinians alleged the death was the work of Israelis intent on assassinating loyalists in Palestinian Authority President Yasser Arafat's Fatah movement, a faction of the Palestine Liberation Organization. Israeli authorities, who have previously acknowledged targeting some Fatah participants, made no comment about the death.
Following the explosion, mourners marked the man's funeral in the early afternoon Sunday.
The death came just hours after Israeli and Palestinian negotiators met Saturday night in hopes of clearing a way to a resumption of peace talks to end more than 11 weeks of violence. At least 350 people, mostly Palestinians, have died in the clashes.
Saturday's talks were the second such high-level meetings to take place in a week. Top Palestinian negotiators Saeb Erakat and Mohammed Dahlan met with Israeli Foreign Minister Shlomo Ben-Ami and Gilead Sher, a senior aide to Israeli Prime Minister Ehud Barak, according to Ben-Ami's office.
Arafat spokesman Nabil Abu Rudieneh said that the Palestinian leader and U.S. President Bill Clinton had spoken by telephone about the next steps in the peace process.
"It could be a new attempt, and it could be the last attempt as well," he said.
The previous summit at Camp David, Maryland, ended in July when Arafat and Barak failed to resolve key issues despite U.S. mediation.
"If there are negotiations going on between Palestinians and Israelis, it would come in the form of a continuation of the Camp David summit, meaning bringing (together) President Arafat, Mr. Barak and President Clinton," Erakat said.
'Death to Israel'
Earlier Saturday, 22-year-old Noor Abu Safi was one of six Palestinians buried in Gaza, after his body was carried through Gaza's streets by thousands of Palestinians who chanted "Death to Israel' and "Long live the gun."
The six were killed Friday in a series of clashes between Israeli troops and Palestinians. Safi's death came hours after Arafat and Ben-Ami met Thursday in Gaza to discuss the stalled peace process.
Israeli officials said Safi was shot and killed as he tried to stab an Israeli soldier at the Erez crossing between Gaza and Israel. They said a bomb had been found on his body. The Palestinians did not comment on the incident.
Meanwhile, Palestinians remain confined to their homes in Israeli-controlled Hebron, where Israeli troops have been clashing with Palestinian protesters. The Tomb of Abraham, a sacred Muslim and Jewish site, is included in the 20 percent of Hebron controlled by Israel.
Israeli officials told CNN they imposed the curfew to protect civilians from the fighting and to prevent friction between Israelis and Palestinians.
Peace could help Barak
The latest high-level talks come amid Israel's prime ministerial election. Barak resigned earlier this month forcing the special election, saying he wanted a new mandate to negotiate peace with the Palestinians.
The election is expected to be held February 6.
A quick peace agreement could benefit Barak. Opinion polls have him trailing two likely challengers -- Likud party chairman Ariel Sharon and former prime minister and Likud leader Benjamin Netanyahu.
Netanyahu lost to Barak 18 months ago.
The Israelis have said they would not negotiate until the Palestinians curb the violence. But the Palestinians say the Israelis are perpetuating the conflict.
Clinton preferred
While Palestinian and Israeli officials welcomed the appointment Saturday of retired Gen. Colin Powell as U.S. Secretary of State, both Sher and Erakat said they would prefer to finalize a peace deal with Clinton.
Clinton leaves the White House on January 20, the day Republican President-elect George W. Bush is inaugurated. The change in administrations would mean the parties would need to take time to study the "details of the peace process which are well-known to the current administration," Sher said.
Erakat said he was certain a Bush administration would pursue a Mideast peace "with vigor," but added Clinton had been involved in the process for eight years.
"I must believe that over the next four to five weeks, we must exert maximum effort to ensure the participation of President Clinton," he said.
Rudieneh and Israeli Defense Minister Ephraim Sneh welcomed Powell's appointment. Rudieneh said the Palestinians were ready to cooperate with Powell, while Sneh said the former general understood the threat rogue nations posed to the Mideast.
Powell, a former chairman of the U.S. Joint Chiefs of Staff, said the Mideast would be one of his priorities.
"We must always be sure that Israel lives in freedom and security and peace," Powell said after his appointment.
"But at the same time, we have to do everything we can to deal with the aspirations of the Palestinians and the other nations in the region who have an interest in this. I think America will continue to be a friend to all sides," Powell said.
CNN Producer Lynn Felton and CNN Correspondents Jerrold Kessel and Matthew Chance contributed to this report.