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Article from http://abcnews.go.com:

Israel Warns of New 'Axis of Terror'

Israel Warns That New 'Axis of Terror' - Iran, Syria, and Hamas - Is Sowing Seeds of War

By LAURIE COPANS

The Associated Press

TEL AVIV, Israel - After Hamas defended a deadly suicide bombing Monday, Israel's U.N. ambassador warned that recent statements by the Palestinian government, Iran and Syria "are clear declarations of war, and I urge each and every one of you to listen carefully and take them at face value."

Ambassador Dan Gillerman cautioned that a new "axis of terror" Iran, Syria and the Hamas-run Palestinian government was sowing the seeds of the first world war of the 21st century.

"A dark cloud is looming above our region, and it is metastasizing as a result of the statements and actions by leaders of Iran, Syria, and the newly elected government of the Palestinian Authority," he said.

A Palestinian suicide bomber struck a packed fast-food restaurant during Passover, killing nine people and wounding dozens in the deadliest bombing in more than a year. In a sharp departure from the previous Palestinian government's condemnations of bombings, the Hamas-led administration defended the attack as a legitimate response to Israeli "aggression."

The Palestinian U.N. observer, Riyad Mansour, condemned Monday's suicide bombing and the loss of innocent civilians on both sides. But he attacked Israel for its latest military escalation which killed 21 Palestinians from April 7-9.

The bloodshed and Hamas' hard-line stance could set the stage for harsh Israeli reprisals and endanger Hamas' efforts to secure desperately needed international aid and acceptance.

Israel said it held Hamas responsible for the attack in Tel Aviv even though a separate group, Islamic Jihad, claimed responsibility. Islamic Jihad has close ties to Israel's archenemy, Iran.

"Hamas' constant preaching for the destruction of Israel serves as a catalyst for these attacks," said David Baker, an Israeli government spokesman.

In an initial response, Israeli aircraft attacked an empty metal workshop in Gaza City early Tuesday, causing no injuries. The army said the workshop was used by the Popular Resistance Committee's militant group to manufacture homemade rockets to launch at Israel.

The Palestinian suicide attack took place just two hours before Israel's newly elected parliament was sworn into office, and Prime Minister-designate Ehud Olmert said Israel would react with appropriate means.

The moderate Palestinian president, Mahmoud Abbas of the rival Fatah party, condemned the suicide bombing and said he had ordered Palestinian security forces to prevent future attacks.

"These kinds of attacks harm the Palestinian interest, and we as an authority and government must move to stop it," Abbas said. "We will not stop pursuing anyone who carries out such attacks."

But Abbas is currently in a power struggle with Hamas, and it remains unclear who is ultimately in charge of the Palestinians' security forces.

The European Union condemned the bombing, and Russia called on the Palestinian Authority to stop future attacks. U.N. Secretary-General Kofi Annan told the Palestinian government "to take a clear public stand" against such acts. And the United States warned of grave consequences for the Hamas-led government.

Despite the suicide bombing, Annan announced later Monday that the four key players promoting Mideast peace efforts the United Nations, the United States, the European Union and Russia would meet in New York on May 9 to discuss prospects for settling the Israeli-Palestinian conflict.

The bombing was the first inside Israel since the Hamas Cabinet took office 2 1/2 weeks ago. Militants from Islamic Jihad celebrated by handing out pastries on the streets of Gaza.

The attack came amid a sharp increase in fighting between Israel and the Palestinians across the Gaza border. Militants have fired barrages of homemade rockets at Israel, and Israel has responded with artillery fire.

The suicide bombing took place about 1:40 p.m. when the attacker, carrying a bag stuffed with 10 pounds of explosives, approached "The Mayor's Falafel" near Tel Aviv's central bus station. The restaurant, which had been the target of a January bombing, was packed with Israelis on vacation during the weeklong Passover holiday.

A guard outside was checking the bomber's bag when the device exploded, police and witnesses said.

"Suddenly there was a boom. The whole restaurant flew in the air," said Azi Otmazgo, 35, who was wounded on his hands, foot and head.

The bomb, laced with nails and other projectiles, shattered car windshields, smashed windows of nearby buildings and blew away the restaurant's sign. Blood splattered the ground. Police said the guard's body was torn in half.

The explosion killed a woman standing near her husband and children, said Israel Yaakov, another witness.

"The father was traumatized, he went into shock. He ran to the children to gather them up, and the children were screaming, 'Mom! Mom!' and she wasn't answering, she was dead already," he said.

The wounded were treated on sidewalks. One man was lying on his side, his shirt pushed up and his back covered by bandages. A bleeding woman was wheeled away on a stretcher.

Police said nine civilians and the bomber were killed and dozens were wounded.

The attack was the deadliest since a double suicide bombing on two buses in the southern city of Beersheba killed 16 people on Aug. 31, 2004. It was the second major Passover bombing in four years. A 2002 attack at a hotel in the coastal town of Netanya killed 29 people and triggered a major Israeli military offensive.

Hamas, responsible for dozens of suicide bombings in recent years, has largely observed a 16-month truce with Israel, but Hamas leaders defended Monday's bombing.

"We think that this operation ... is a direct result of the policy of the occupation and the brutal aggression and siege committed against our people," said Khaled Abu Helal, spokesman for the Hamas-led Interior Ministry.

Israeli President Moshe Katsav appealed to the Palestinians to reject violence.

"We want to believe that the political path of the Hamas government is not the path of the Palestinians," he said.

Islamic Jihad identified the bomber as Samer Hammad, 21, from a village outside the West Bank town of Jenin.

In a video released by the group, Hammad said the bombing was dedicated to the thousands of Palestinians in Israeli jails. "There are many other bombers on the way," he said, wearing an Islamic Jihad headband.

Islamic Jihad was behind eight of the nine suicide bombings since the truce declaration.

The attack complicated the Hamas effort to raise money for the bankrupt Palestinian treasury. Hamas is two weeks late paying March salaries for the government's 140,000 workers.

The U.S. and European Union cut off aid to the government because Hamas refused their demands to renounce violence and recognize Israel's right to exist. Israel also stopped transferring tens of millions of tax dollars it collects on the Palestinians' behalf every month.

Hamas said it would turn to Muslim countries to make up the shortfall. Iran and Qatar each pledged $50 million to the Palestinian Authority.