At least 14 people were killed and more than 45 wounded when a powerful car bomb exploded next to a bus and caused it to burst into flames during the morning rush hour Wednesday, police and rescue workers said.

The blast went off on a road near the town of Megiddo as people were heading to work shortly after 7 a.m., regional police chief Yaakov Borovsky said.

"A car drove alongside the bus and exploded. The bus burst into flames, and it's a tough sight, the bus is completely burnt out," he told army radio.

Witnesses said some passengers were trapped alive in the burning bus. One couple burned to death as they hugged each other, an Israel Army Radio reporter at the scene said. Only the scorched metal skeleton remained of the bus.

There was no immediately claim of responsibility. The attack came a day after Palestinian leader Yasser Arafat presented CIA chief George Tenet with a plan to restructure the Palestinian security forces.

The bus left from Tel Aviv, on the Mediterranean coast, and was making several stops in northern Israel. The route passes a number of mostly Arab towns, and both Arabs and Jews were believed to be on the bus, authorities said.

A police official, speaking on condition of anonymity, said at least 14 people were killed and three were critically injured.

The Magen David Adom rescue service said at least 45 people were hurt.

Megiddo is just a few miles across the border from the northern West Bank, and has a large prison where many Palestinians are held by Israel. Many Palestinian bombers have come from the northern West Bank.

Palestinian bombers have carried out dozens of attacks since the current Mideast fighting erupted in September 2000.

"Palestinian terrorists continue to target Israeli civilians," said David Baker, an official in Prime Minister Ariel Sharon's office. "This terror attack shows that the Palestinians have no intention of giving up their campaign."

The United States and Israel have been demanding a revamping of the security forces, with an aim to stopping attacks against Israel.

Arafat appointed Maj. Gen. Ahmed Razak Yehiyeh, 73, to head the new security system, a choice that bypassed many of the more prominent security commanders. Israel said the proposed changes were largely cosmetic.

Israeli forces have surrounded most Palestinian cities and towns in the West Bank, and make almost daily raids to go after suspected militants. The actions produced a brief lull in the number of attacks, but they have been steadily increasing again.

Responding to growing U.S. pressure to fight terror, Arafat presented Tenet with a plan Tuesday for restructuring the unwieldy Palestinian security apparatus. Israel called the proposals "worthless."

The Palestinian leader appointed the 73-year-old general to head the new security array, but Israel said the proposed changes are largely cosmetic because Arafat, who has done little to rein in militants in the past, remains in charge. Some Palestinians also were skeptical, because the reform would still leave six different security branches.

Sharon, meanwhile, gave in to pressure to prevent homicide bombings and approved construction of a fence between part of the West Bank and Israel, defying supporters who fear it would lead to Israel's giving up most of the territory.

Sharon is to travel to Washington to meet Monday with President Bush, their sixth visit. Arafat has yet to be invited to the White House.

Egyptian President Hosni Mubarak is to meet Bush over the weekend. Mubarak will recommend that the U.S. administration set a timetable for creation of a Palestinian state, an aide said Tuesday.

Tenet wound up his mission and was leaving Tuesday after a day of meetings with Palestinian officials. He met with Arafat and then held separate talks with three Palestinian security chiefs — Jibril Rajoub, Amin al-Hindi and Mohammed Dahlan.

Paul Patin, spokesman for the U.S. Embassy in Tel Aviv, said U.S. officials would judge the reform efforts by results. "If there is a cessation of terror, then it's good. If there's not a cessation of terror, it's not good," he said.

The plan presented to Tenet calls for cutting the number of Palestinian security services in half. They would include police, border guards, internal security and external security, military intelligence and Arafat's personal guard unit.

Israel was skeptical. "Reforms that have no substantial change in strategy and policy are ... worthless," said Raanan Gissin, a Sharon adviser. Israel accuses Arafat of doing little to stop attacks or actually encouraging militants.

Tenet was the second senior U.S. official to tour the region in a week. Assistant Secretary of State William Burns met Israeli and Palestinian officials a few days earlier.

In Washington, State Department spokesman Richard Boucher said the administration was laying the groundwork for future steps.

"Once they're back and we've had these consultations, I think we'll be in a better position to describe how we might move forward," he said.

A well-placed U.S. official said the Bush administration is planning for a Mideast peace conference next month in Turkey in a resurgent U.S. effort to resolve the Arab-Israeli conflict.

The official, speaking to The Associated Press on condition of anonymity, said the conference would be held among foreign ministers from the Middle East and Europe.

The conference would be geared to reopening negotiations between Israel and the Palestinians while also addressing the broader Arab-Israeli conflict.

Israeli media reported that Tenet told Arafat the reform plan was unacceptable. According to Israel TV's Channel 2, Tenet told Arafat he must appoint an interior minister, a post Arafat has held since the Palestinian Authority was established in 1994.

Palestinian officials said the new security chief is to be Yehiyeh, who was the commander of the Palestine Liberation Army before Arafat and his leadership returned to Gaza in 1994 and set up the Palestinian Authority. The PLA operated in Lebanon and other Arab countries as the military wing of Arafat's PLO.

There was no official announcement of the appointment.

Since 1994, Yehiyeh has not had a field command. Instead, he has been in charge of the Palestinian delegation in a joint council with Israel, designed to deal with security problems, a body that has met only rarely in recent years.

Yehiyeh's appointment was seen as a slap in the face to several current commanders, especially Dahlan, the powerful Gaza chief, who was hoping to take overall command. Some Palestinians said Arafat's appointment of the elderly general was a way of maintaining control himself.

Dahlan announced his resignation from the Gaza security post late Tuesday, but said Arafat offered him alternative positions, which he was considering. A senior Palestinian official said Dahlan was offered the role of national security adviser.

Haider Abdel Shafi, a veteran Palestinian opposition figure and anti-corruption crusader, said the appointment "disturbs me very much."

"It raises my doubts about the sincerity of doing the necessary reforms," he said. "It seems still the idea of factionalism is there, pleasing one side or another."

In the West Bank, Israeli troops raided several Palestinian areas in search of suspected Palestinian militants. In one confrontation, a 16-year-old Palestinian was shot and killed by soldiers dispersing stone throwers, doctors said.

Near Nablus, Israeli soldiers opened fire at an armored vehicle carrying two photographers from the Reuters news agency. No one was hurt, but the vehicle was slightly damaged. The photographers said the vehicle was clearly marked as a press car. The Israeli military told Reuters it would check the incident, but the vehicle was apparently in a closed military zone.

Sharon reluctantly approved building a fence between part of the West Bank and Israel's narrowest sections, blocking the way from Palestinian towns on the unmarked line and Israeli cities a few miles away.

The cities, including Netanya and Hadera, have been frequent targets of Palestinian bombers, and residents have been pressuring their government to block access.

The main complication is political. Sharon believes Israel must keep much of the West Bank for security reasons, and in his camp are Jewish settlers who oppose territorial concessions to the Palestinians.

Some Israeli doves recommend a unilateral Israeli pullout from most of the West Bank, dismantling many settlements and fortifying a temporary border that would be open to negotiation at a later stage.

The Palestinians want a state in all of the West Bank and Gaza with a capital in east Jerusalem, demanding a total Israeli withdrawal to the cease-fire lines that ended the 1948 war that followed creation of the state of Israel. Instead, in interim peace accords, the two sides pledged to negotiate their boundaries. Peace talks broke down in January 2001 amid Mideast violence that is still going on.

The fence is to run 68 miles from a point northeast of Tel Aviv to southeast of Haifa, a stretch of country parallel to the Mediterranean Sea. At some points, Israel's narrow coastal strip is only nine miles wide.

The Associated Press contributed to this report.