Israel tightened security around Jerusalem yesterday for fear of violence after a Palestinian gunman killed eight people at one of the city's most prominent Jewish religious schools.
The gunman, identified as an East Jerusalem resident, was shot dead after opening fire with an automatic weapon at students inside the library at the Merkaz Harav seminary.
Hamas, which controls the Gaza Strip, hailed the "heroic operation" but stopped short of claiming responsibility.
The attack was greeted with celebrations in Gaza after a recent Israeli offensive there killed more than 120 Palestinians, about half of them civilians.
Israel called Thursday's shooting a "massacre" but said peace talks would continue with Palestinian President Mahmoud Abbas, who condemned the attack.
Israel Radio said the gunman was an Israeli Arab.
Israel deployed thousands of police in Jerusalem, spokesman Micky Rosenfeld said, and limited Palestinian access to Friday prayers at the al-Aqsa mosque, Islam's third holiest site.
Thursday's attack, which could further complicate US efforts to broker a statehood deal by the end of this year, followed a visit by US Secretary of State Condoleezza Rice, who persuaded Mr Abbas to resume peace talks he suspended over the Gaza offensive.
Washington has tried to persuade Israel to ease some travel restrictions on Palestinians in the occupied West Bank, but the attack makes that far less likely to happen soon.
Mark Regev, spokesman for Israeli Prime Minister Ehud Olmert, called on Mr Abbas to do more to rein in militants.
"They have clear obligations to act against terrorist cells, to act against the infrastructure of terrorism," Mr Regev said.
"While we understand they have limitations on their capabilities today, we believe that they could be doing much more and it is incumbent upon them to do so," he said.
Israel has yet to meet its own commitments under a long-stalled peace "road map" to halt all settlement activity and to remove Jewish outposts in the occupied West Bank.
US President George W. Bush offered his condolences to Mr Olmert. "I told him the US stands firmly with Israel in the face of this terrible attack," Bush said in a statement.
UN Secretary-General Ban Ki-moon and the foreign ministers of Germany, France and Britain also condemned the killings.
The US accused Libya, backed by several other countries, of preventing the UN Security Council from condemning the assault as a "terrorist attack".
A member of the Libyan delegation said the council should not speak about the Jerusalem attack while ignoring the Gaza situation.
In addition to those killed at Jerusalem seminary, at least 10 people were wounded, three of them seriously, emergency workers said.
It was the highest Israeli death toll since April 17, 2006, when 11 people were killed and over 60 wounded in a suicide bombing during the Passover holiday in Tel Aviv.
Chronology - Major attacks in Israel
Here is a chronology of major attacks in Israel in the last three years. Death tolls do not include attackers.
2005:
February 25, - A suicide bomber kills five Israelis and wounds about 50 people outside the Stage nightclub in Tel Aviv. Islamic Jihad claims responsibility.
July 12 - A Palestinian blows himself up at an Israeli shopping mall in Netanya, killing five and wounding at least 30. Islamic Jihad claims responsibility.
August 28 - A suicide bomber blows himself up at the entrance to Beersheba's central bus station, wounding at least 40.
October 26 - A Palestinian blows himself up in the main market at Hadera. Six people die and more than 30 are wounded.
December 5 - A suicide bomber blows himself up at the entrance to the Sharon shopping mall in Netanya, killing five and wounding at least 40. Islamic Jihad's Jerusalem Brigades claims responsibility.
December 29 - An Israeli soldier and two Palestinian bystanders are killed in a suicide bombing in Tulkarm in the occupied West Bank. Islamic Jihad claims responsibility.
2006:
January 19 - A Palestinian suicide bomber blows himself up at a sandwich stand near Tel Aviv's old central bus station, wounding 30 people. Islamic Jihad claims the bombing.
March 30 - A Palestinian suicide bomber kills four Israelis near the West Bank settlement of Kedumim. Al-Aqsa Martyrs Brigades later claims responsibility.
April 17 - A Palestinian suicide bomber kills 11 people and wounds about 60 at a sandwich stand near Tel Aviv's old central bus station. Both Islamic Jihad and Al Aqsa Martyrs Brigade claim responsibility.
2007:
January 29 - A suicide bomber kills three people in a bakery in Eilat at the northern tip of the Red Sea. Three groups - Islamic Jihad, al-Aqsa Martyrs Brigades, part of President Mahmoud Abbas's Fatah faction, and the previously unknown "Army of Believers" - claim responsibility.
2008:
February 4 - A suicide bomber kills a woman in the southern town of Dimona. A second blast is prevented when police shoot dead a second bomber. Hamas's armed wing claims responsibility the next day, the first such attack claimed by the group since 2004.