Benny Peretz, a 45-year-old Jerusalem hairdresser, was drinking coffee outside his shop Thursday afternoon when he heard a sound that at first he thought might have been a car. But Peretz, who saved the life of a young girl during another terrorist bombing in 1997, had seen enough in his 20 years as a Jerusalem business owner to fear the worse.

His worst fears were confirmed when he rushed to the Sbarro restaurant around the corner from him, where a Palestinian suicide bomber had just killed himself and 15 other people.

"This terrorist knew what he was doing," Peretz told Fox News in anguished, broken English from Jerusalem. "He wanted many people dead."

As crying women huddled on the sidewalk while other survivors were frozen in shock, Peretz entered the gutted pizzeria and found a harrowing scene strewn with the bodies of "children, boys, men and women," the living indistinguishable from the dead. He came upon two teenage girls, their eyes, faces and heads covered in blood.

"I think they are dead (but) I put my hands (on them) and think there is life," said Peretz, who said one of the teenagers was Russian. Peretz, who learned First Aid several years ago, he said, so he could help out in bombing emergencies, tried to help both girls.

"They were very wounded," he said. "I hope they are alive."

Sbarro had its usual crowd of families and office workers enjoying lunch when the deadly blast ripped through the pizzeria, leaving the festive restaurant a gutted, blackened shell.

"In the summer, we go to the city to eat," Peretz said, explaining that he believed the terrorist had calculated the bombing to cause the most carnage possible.

Around the dead and wounded, the pizzeria lay in ruin, kitchen tiles blown off the walls, wires dangling from the ceiling. The cries of the wounded mixed with the wailing of ambulances, as policemen shouted into radios and urged bystanders away.

Jason Kanar left his uneaten lunch and a friend at Sbarro to get a newspaper at a nearby store. The blast took place as he made his way back to the Sbarro at the intersection of Jaffa and King George streets.

"I saw a man lying on the street shaking like he was being electrocuted and a child that looked dead in another man's arms," the 20-year-old Briton said. "A woman soldier sat motionless in shock inside with the table that should have been in front of her gone."

Kanar's friend escaped with minor injuries.

Outside the restaurant, two baby strollers stood deserted and damaged. There was no sign of blood.

Orthodox Jewish volunteers searched the streets for any human remains, which they put in bags in preparation for religious burials. Police forensic experts, meanwhile, combed the restaurant and the sidewalk for clues.

An hour after the blast, for which the militant Islamic Jihad group claimed responsibility, panic returned to the scene outside Sbarro when there was word of another possible bomb attack.

People began running toward the site of the supposed attack and sirens wailed once again as the ambulances sped away. It turned out to be a tire explosion at the city's main bus terminal up the street.

"We don’t want the terror to (beat) us. We want life," said Peretz, who blamed the Oslo accord of 1993, a peace agreement he once supported, for the escalating violence. He said his experience on the streets of Jerusalem have changed his mind.

"The terror is coming after Oslo. Now, I’m sorry. I want this finished," said Peretz. "I work in the city and I have seen many terrors, and what I see I don’t forget. We must finish this."

The Associated Press contributed to this report.