Jerusalem: Israel vowed strong retaliation for a bus bombing in Northern Israel on August 4, while the Palestinian leadership condemned it as a "terrorist operation" but blamed the violence on the hardline policies of Prime Minister Ariel Sharon.

Israeli government spokesman Avi Pazner vowed the Jewish state would fight "without mercy" against the Palestinian militants who blew up the bus.

"It is clear that after this particularly murderous attack that Israel must continue to fight without mercy against these terrorist organisations who are behind these atrocities," Pazner told AFP.

"This is a long-term fight we are in to prove to these organisations that they will not shake our determination to conquer this scourge," he added, saying that while the cost of the conflict was terrible, "the Palestinians will end up realising they have more to lose than to win".

The Palestinian leadership condemned the bus attack that killed nine people and wounded some 50 others, as a "terrorist operation".

"We condemn this like any operation committed inside Israel," said a statement from the Palestinian cabinet and the Palestine Liberation Organisation, quoted by its news agency WAFA.

However, they blamed the "persistence of Sharon in wanting to impose a military solution to the Israeli-Palestinian conflict, his re-occupation of the West Bank and the arrest of thousands of Palestinian police officers" for undermining all security efforts in the occupied territories.