Bus attack injures Israelis

Israel killed one of Yasser Arafat's bodyguards on Tuesday

In this story: Palestinian life turned to 'hell' Barak, Sharon near agreement? Sharon to pursue interim agreements RELATED STORIES, SITES

JERUSALEM (CNN) -- At least 25 people have been injured, three seriously, after a bus drove into a queue of Israeli military and civilians on the southern outskirts of Tel Aviv.

Israeli authorities believe the attack was deliberate after the bus driver sped from the scene, chased by police towards Gaza.

The driver was eventually stopped and shot by police, but his condition was unknown.

Police believe there were explosives on board the bus, and that it was a stolen bus.

VIDEO CNN's Jerrold Kessel reports on the economic impact of continuing violence in the region (February 13) Play video (QuickTime, Real or Windows Media) Remnants of the car are shown and CNN's Fionnuala Sweeney hears from officials on both sides (February 13) Play video (QuickTime, Real or Windows Media)    TIMELINES Recent acts of violence in the Middle East:  • Bombings  • Activist deaths

AUDIO Palestinian Cabinet Minister Ziad Abu Zayyad on conditions of Palestinians under Israeli occupation 565K/53 sec. AIFF or WAV sound Israeli Deputy Defense Secretary Ephraim Sneh gives reasons for Israeli attacks 425K/40 sec. AIFF or WAV sound

MESSAGE BOARD Mideast peace

RESOURCES Domestic and international reaction to the election of Ariel Sharon Timeline gallery: Israeli leader Ariel Sharon

The incident comes a day after a deadly Israeli helicopter mission inside Gaza.

Palestinian police said that Massoud Ayyad, 60, died earlier when Israeli helicopter gunships fired four missiles into his car as he drove on the outskirts of the Jabaliya refugee camp.

Ayyad, a lieutenant colonel in Palestinian Authority President Yasser Arafat's bodyguard unit, Force 17, was the sole occupant of that car, but four men in a car behind him were slightly injured in the attack.

"This man, Massoud Ayyad, was in charge of terrorist operations and planned more terrorist operations, including kidnapping, including shelling of Israeli villages," Israeli Deputy Defense Secretary Ephraim Sneh told CNN. "Since we could not arrest him ... in this case we had no option but to hit him in the way we did."

Sneh said such attacks -- Israel has killed about 20 Palestinian activists in the West Bank and Gaza since the start of the latest Palestinians uprising five months ago -- would end if Palestinian officials "arrested those people who mastermind and organize the terrorist operations."

"As long as the Palestinian Authority doesn't fulfill its duty to contain terrorism, there is no alternative left for us but to act," Sneh said. "As long as there is a war, we are in war."

Palestinian life turned to 'hell'

But Palestinian Cabinet Minister Ziad Abu Zayyad called the attack an assassination and denied that Ayyad was a member of Hezbollah -- a pro-Iranian organization -- or had any contacts with the group.

Zayyad told CNN that such claims of terrorism and assassination were not the real problem, however.

"Even if we assume that (Massoud Ayyad) was active and he was shooting, why was he active and why he was shooting?" Zayyad said. "It is the situation. It is the occupation. It is the resistance against occupation, and saying this doesn't mean that they agree with the Israeli allegations against this man."

"No one now speaks about how the Palestinians are living, what are the conditions inside the Palestinian territories," he said. "Palestinians are not able to move from one village to another, from one city to the other. They can't go to their schools, they don't go to universities, they don't go to their work, and Israel is demolishing houses, uprooting trees, turning their life to hell."

Zayyad acknowledged that the Israelis were duty-bound to protect their citizens, but noted that "as long as Israel is trying to oppress our people, unfortunately this uprising will continue and there will victims on both sides."

Barak, Sharon near agreement?

Tuesday's dramatic events threatened to overshadow Israeli Prime Minister-elect Ariel Sharon's negotiations to form a coalition government with the Labor Party of defeated rival Ehud Barak.

Officials said the two men have agreed on most elements of a joint platform, but the fresh violence -- including a 14-year-old Palestinian shot and killed in Gaza and an Israeli soldier wounded in separate incidents -- were an ominous reminder of the challenges ahead.

Sharon has said he will not negotiate while the violence, which has claimed more than 400 lives -- most of them Palestinian -- continues.

But an agreement between Sharon's hawkish Likud party and the center-left Labor Party could pave the way for a resumption of peace talks.

Coalition talks were due to start Tuesday to discuss, among other issues, which Cabinet posts the Labor Party would receive under Sharon.

Sharon has offered the defense ministry to Barak despite Barak's promise to resign from public life after his defeat in last week's election. Nobel laureate Shimon Peres is thought to be a front-runner for foreign minister in Sharon's cabinet.

Sharon to pursue interim agreements

But Labor parliamentarian Dalia Itzik said a coalition deal was not yet decided, despite an apparent breakthrough in negotiations.

"I can't say an agreement was reached, but certainly a lot of progress has been made," Itzik told Israel Radio. She said Barak and Sharon would speak early Tuesday to discuss other issues that were too sensitive to be written in the coalition deal.

These issues would probably be the government's position on a future Palestinian state, dismantling Jewish settlements and the fate of Jerusalem -- items that Israel Radio reported did not appear in the draft agreement drawn up late Monday.

Labor officials were said to have dropped demands that Sharon go after a comprehensive peace agreement, as Barak had unsuccessfully attempted to do, and instead would agree to Sharon's plan to pursue interim agreements with the Palestinians where possible.

The Palestinians, however, have rejected the idea of seeking interim solutions to the 52-year-old conflict.

"They want to bring back the conflict to the beginning," Zayyad said. "They are talking about interim arrangements," he said, even though the parties had moved "a long way ahead towards a solution."

CNN Correspondents Jerrold Kessel and Fionnuala Sweeney contributed to this report.

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