Jerusalem: Two Israelis and two Palestinians were killed on July 30 in a bloody spate of Palestinian attacks, including the first suicide bombing in Jerusalem in nearly six weeks.

A Palestinian teenager blew himself up in downtown Jerusalem, wounding seven other people, police said. In the West Bank, two Jewish settlers were ambushed and killed in a village, while a Palestinian, who knifed a settler couple, was also gunned down.

The slayings enraged officials of the Jewish state who had pledged to ease the plight of Palestinians, facing a humanitarian crisis with Israel occupying most of the West Bank and slapping curfews and other sanctions on the civilian population.

"The more we ease the restrictions, the more it become dangerous for Israelis," government spokesman Danny Seaman said. "The question is them (Palestinians) being uncomfortable in their lives or Israelis being killed."

Police said a Palestinian youth about to be intercepted by police ducked into the doorway of a small falafel bar in downtown Jerusalem and detonated an explosive device he was carrying in a bag.

The blast occurred in an area of central Jerusalem close to the boundary with occupied east Jerusalem and near the Russian Compound, the site of several bars but also a police station and prison.

Public television said most of the injured suffered from shrapnel wounds suicide bombing since attacks on June 18 and 19 that left a total of 25 Israelis dead.

Israelis had been bracing for new suicide attacks since Palestinian militants vowed to avenge a bloody July 22 air strike in Gaza City that killed 14 people, including nine children, in addition to a targeted top militant.

The Al Aqsa Martyrs Brigades, an armed offshoot of Palestinian leader Yasser Arafat's Fatah movement, claimed a Jerusalem blast.

The caller said the group would issue a written statement shortly.

Kobi Zrihen, spokesman for the Jerusalem police, said he casualty toll could have been higher. "Definitely, the presence of the police officer prevented him from blowing himself up in a crowded place," the spokesman said.

Senior foreign ministry official Mark Sofer called the bombing "the latest in a long line of bestial atrocities perpetrated by Palestinian terrorists against innocent Israeli citizens".

Elsewhere, security forces had arrested a suspected Palestinian "terrorist" overnight in a mainly Arab Israeli village North-East of Tel Aviv, Army radio reported.

The Jerusalem blast was the first attack inside Israel since the military's aerial bombing of Gaza City. Militant groups had previously targeted settlers only in the occupied territories.