Suicide Bombing Rocks Ultra-Orthodox Jerusalem Neighborhood

Three Israeli babies were among the nine people killed Saturday night during a suicide bombing in the narrow streets of an ultra-Orthodox Jerusalem neighborhood.

Hundreds of Palestinians living nearby were reportedly celebrating the attack, an apparent retaliation for recent Israeli military infiltration into West Bank refugee camps.

In addition to the Palestinian bomber, at least nine Israelis were killed and at least 57 were wounded, four of them seriously, according to police and hospital officials.

As the Jewish Sabbath ended and residents poured from synagogues into the winding alleyways of Mea Shearim, the bomber set off explosives as he stood near a group of people, police said.

The thunderous blast was heard throughout downtown Jerusalem, and sent flames leaping into the air from a car that caught fire.

"I came right out (on the street) and saw a car on fire, the building next to it was also on fire," said witness Yitzhak Weinberger, 22.

The bomber was later identified as 20-year-old Mohammed Daragmeh. Palestinian security sources say Daragmeh was a member of the Al Aqsa Martyrs Brigades, part of Palestinian leader Yasser Arafat's Fatah movement.

Shortly after the bombing, an Israeli policeman was shot dead in a Jewish settlement outside Jerusalem. The Al Aqsa Martyrs Brigade claimed responsibility.

Arafat's administration issued a statement simultaneously denouncing the bombings, blaming Israel for the recent violence, and blaming Israel for future violence. It said it holds "Sharon and his government responsible for the deterioration in the region, and any coming deterioration."

With sirens wailing, ambulances and police cars rushed to Mea Shearim, an ultra-Orthodox neighborhood in west Jerusalem. It is just across a main road from Palestinian neighborhoods in east Jerusalem. Rescue workers carried the injured away on stretchers.

"I saw a car park. Then two minutes later I heard a blast," a witness, who gave his name only as David, told the radio.

Police did not immediately have additional details. Firefighters hosed down a smoking car that appeared to be the one used in the blast, according to an Associated Press reporter at the scene.

"This has nothing to do with warfare, this nothing to do with national liberation, this has to do with the murder of innocent Jews, coming back from their evening prayers," said Israeli government spokesman Dore Gold. "The state of Israel knows how to defend the people of Israel, and will do so."

Palestinians, meanwhile, have expressed outrage at Israel's military incursion into two West Bank refugee camps over the past three days, and Palestinian militants had vowed to respond with attacks.

Fox News' Jennifer Griffin and The Associated Press contributed to this report.