Israel put a stop to its self-imposed cease-fire Saturday after a Palestinian suicide bomber killed 18 people at a Tel Aviv disco — but it also allowed Palestinian leader Yasser Arafat time to enforce control over terrorists before retaliating.

Israeli leaders said they believed Arafat was directly responsible for the bloody Friday-night bombing — and barred him from using the Gaza Strip international airport Saturday — but decided to delay any military action or airstrikes against Palestinians.

Still, Palestinians were feeling uneasy as they braced for the Israeli counterattacks they assumed could come at any time. Arafat's headquarters in the West Bank emptied out Saturday after the government ordered thousands of public servants and police officers to evacuate the premises. Foreigners working in the region and fearing for their safety also left by the dozens.

As Israelis reeled from the worst terrorist bombing in five years, Israeli television broadcast heart-wrenching photos of the fresh-faced teen-agers killed in the Friday nightclub attack, most of them recent immigrants from the former Soviet Union.

Reports initially listed the death toll at 17 and the injured numbering around 100, but hospital officials confirmed an 18th casualty on Saturday, and news accounts put the number of wounded between 90 and 115.

Israeli officials, speaking after a seven-hour-long Cabinet meeting that lasted through the Jewish Sabbath, said the government had made a decision on possible steps they could take in reaction to the terrorist explosion at the disco — but delayed acting on any resolutions.

Speaking on condition of anonymity, a senior military official said the army supported restraint after concluding that "the old approach that an attack required a response within a few hours was not effective. Diplomatic pressure days will be more effective than military activities in coming days."

Israel hopes Arafat will end the eight-month conflict that erupted even as peace talks continued under Israel's previous government. That government had offered the Palestinians a state in almost all the West Bank and Gaza, but did not meet his demand that millions of refugees be granted the right to return to Israel.

Yet whether those hopes will be realized remains in doubt. Past experience has shown it to be very difficult for Arafat to control extremist, militant terrorist groups — even at times of close Israeli-Palestinian security cooperation.

Israeli officials say Arafat now supports militant groups and allows them to recruit bombers and prepare explosives without interference.

Cabinet Minister Danny Naveh spoke of giving Arafat a matter of hours to make good on his pledge Saturday that he was ready to work for an "immediate and unconditional cease-fire." But Tsachi Hanegbi, a Cabinet hard-liner, said harsh Israeli action was inevitable because "Arafat is a liar and a hater of Jews."

Arafat condemned the bombing but did not say what steps he was prepared to take to prevent another one.

Meanwhile, dozens of foreigners living and working in the Gaza Strip left Saturday amid fears of an Israeli military retaliation.

"They were our only hope that the response wouldn't be so terrible," said a Palestinian employee of a foreign consulate who requested anonymity.

The foreigners packed lightly, expecting to return within a few days, after their consulates and embassies in Israel contacted them, the employee said. He said he knew of at least 20 foreigners who left Gaza on Saturday.

After previous bomb attacks, Israel has responded by shelling Palestinian security installations, but not civilian offices.

The U.S. embassy said recent events, including the brief detention of an American journalist by militants several days ago, heightened its concern for the safety of U.S. citizens in Gaza.

"Americans should not travel to Gaza at the present time and those who live there should depart to a safer location when they can do so," the embassy said in a travel warning issued to American citizens Saturday.

U.N. officials would not say whether the United Nations had ordered its foreign staffers to leave the Gaza Strip.

Other foreigners took measures to prevent their homes and offices from becoming Israeli military targets, flying their national flags from official residences and offices.

The Palestinian leader himself was stranded in the West Bank after Israel barred him from using Gaza International Airport, thus blocking his return to his headquarters in the Gaza Strip, according to Arab security officials.

He did, however, receive calls from Secretary of State Colin Powell and regional leaders, the officials said.

The suicide bomber blew himself up just before midnight outside the Pacha nightclub, on a trendy promenade in Israel's seaside city of Tel Aviv. The blast killed 18 Israelis, including two sisters ages 16 and 18. Of the wounded, 14 remained in critical or serious condition Saturday, hospital officials said.

The explosive contained ball bearings, nails and screws that caused particularly severe injuries when they flew out in all directions.

There were conflicting reports about who was responsible. The Qatar-based Al Jazeera satellite television station said a group calling itself the Palestinian Hezbollah claimed responsibility. Abu Dhabi TV said the assailant apparently was a member of the militant Islamic Jihad group from the West Bank town of El Bireh.

Since fighting erupted last September, 484 people have been killed on the Palestinian side — including Friday's attacker — and 105 on the Israeli side.

The disco blast was the deadliest since a series of suicide bombings by Islamic militants in the spring of 1996.

Israel sealed off Palestinian towns and villages in the West Bank, barring residents from entering and leaving. In Gaza, Israel sealed off the main bypass road for Palestinians, effectively cutting the strip into two.

Palestinian fishermen were ordered to return to shore, as Israeli patrol boats enforced a sea blockade. Israel also closed crossings from the Palestinian areas to Egypt and Gaza.

Arafat aide Ahmed Abdel Rahman warned against any military retaliation, saying: "What's happening on the ground is legitimate resistance for the Palestinian people who are under occupation."

Crowds of angry Israelis, meanwhile, gathered at a mosque across the street from the disco, setting cars on fire and throwing stones at Muslim worshippers, some of whom threw stones back. Israeli demonstrators chanted "Death to the Arabs" and demanded Prime Minister Ariel Sharon order harsh retaliation.

Police, who scuffled with a few Israelis, reported several arrests and injuries, including a number of police officers.

The Israeli Cabinet said after its emergency session that it held Arafat directly responsible for Friday night's blast and other recent attacks.

Arafat has formed a "coalition of terrorism" in the areas under his control, the Cabinet said. The Cabinet statement it would take all actions necessary to protect Israeli citizens, but did not elaborate.

Asked about the policy of restraint declared almost two weeks ago, Transport Minister Ephraim Sneh told The Associated Press that "there is no cease-fire because we are under attack."

Israel Radio, quoting senior Israeli officials, said the Cabinet ministers also discussed the possibility of banishing Arafat if the Palestinian violence persisted.

A Sharon adviser, Raanan Gissin, refused to discuss specific steps the Cabinet decided on. "But I will emphasize that time is running out for Arafat" to end the violence, he said.

President Bush demanded Arafat condemn the bombing and call for an immediate cease-fire. And U.N. Secretary-General Kofi Annan said he was horrified by the bombing.

Friday's carnage capped a week of efforts by the United States to bring the two sides together again and restart the peace process.

Israeli and Palestinian security chief held two rounds of talks and U.S. diplomats met with Israeli officials to discuss implementation of a report by an international commission headed by former U.S. Sen. George Mitchell. The report recommended a staged process of an end to violence, confidence-building measures and a return to negotiations.

The Associated Press contributed to this report.