A bomber blew himself up aboard a bus filled with students in this northern Israeli city Wednesday, killing at least 16 people and injuring 55. The blast ended a two-month lull in homicide bombings.

About 10 of the victims were high school students -- among them 14-year-old Avigail Leitner, a U.S. citizen, authorities said. Two soldiers were also killed.

Police said the homicide bomber, Mahmoud Hamdan Kawasme, 20, of the West Bank city of Hebron, was carrying a letter praising the Sept. 11 attacks. No group claimed responsibility for the bus blast.

In a first response to the attack, Israel's Security Cabinet ordered the closure of the West Bank and Gaza Strip until further notice, banning all Palestinians from entering Israel, the Israeli military said early Thursday.

Later, about 50 Israeli tanks accompanied by helicopter gunships moved deep into the Jabaliya refugee camp next to Gaza City. Two Palestinians, a 60-year-old Palestinian night watchman and a 25-year-old gunman, were killed and 11 other people wounded in exchanges of fire, hospital officials said. Israeli helicopters also fired three missiles at a target, but gave no further details.

Israel's new hard-line government had pledged earlier to step up strikes against militant strongholds in the Gaza area. Dozens of Palestinians have been killed in more than two weeks of raids, including at least 10 civilians. s of explosives.

Bus No. 37 was packed with students from Haifa University when it stopped in the hilltop neighborhood of Carmelia at 2:17 p.m. to let off passengers.

"I suddenly heard an explosion," said bus driver Marwan Damouni, an Israeli Arab, who was being treated at a hospital. "I didn't feel anything. I didn't hear anything. I opened my eyes after a minute and saw blood all over my arms."

The explosion blew off the bus roof, shattered all its windows and toppled nearby palm trees. Floodlights cast an eerie glow on the scene, illuminating the charred skeleton of the vehicle.

The bomb was laden with metal shrapnel for greater deadliness, according to Police Commissioner Shlomo Aharonishki. Initial reports said the blast was caused by 130 pounds of explosives.

Ovadia Saar, who was driving another bus just behind the one that was attacked, said he saw "the back of the bus fly into the air, and the windows blew out and a great cloud of dust covered the bus."

"I got out and ran toward the bus. It was a horrible sight. There were a few bodies in the street," he said. "Those we saw breathing, we evacuated."

A spokesman for the Islamic militant group Hamas, Abdel Aziz Rantisi, praised the bombing but did not claim responsibility. "We will not stop our resistance," he said. "We are not going to give up in the face of the daily killing" of Palestinians.

After the bus bombing, some Palestinians in Gaza called each other on cell phones. Some were jubilant.

"It's about time. They've kept on hitting us and killing us, and now we've struck back," said an ice cream vendor in Gaza, who refused to give his name.

Students from Haifa university rushed to television sets to watch the coverage. Initially, a cafeteria manager refused to switch the channel from MTV, fearing arguments would erupt among students. Of the university's 15,000 students, about 20 percent are Arab.

"Haifa is the city where Arabs and Jews live together," said Eyal Berkovic, 25, a first year Jewish biology student who was waiting for the bus to take him to an afternoon class when the blast shook the ground. "It should be an example" of getting along, he said.

Police did not immediately have details on the American victim, Avigail Leitner, and her links to the United States.

The indefinite closure of West Bank and Gaza threatens to aggravate a crippled Palestinian economy. Two reports issued by the United Nations and World Bank on Wednesday linked such closures to the economic woes, saying almost 2 million Palestinians live on less than $2 a day.

The Haifa blast was the first terror attack in Israel since Jan. 5, when a pair of homicide bombers killed 23 people in Tel Aviv. It was the first bus bombing since Nov. 21, when 11 passengers were killed in a homicide attack in Jerusalem.

There have been 87 homicide attacks in Israel in 29 months of violence that has left 2,160 people dead on the Palestinian side and 743 on the Israeli side. The violence ended talks on a final peace settlement and helped Sharon win re-election.

Israel blamed Yasser Arafat and the Palestinian Authority for failing to stop attacks. Palestinian Authority officials denounced the attack and rejected the Israeli charges. urs after the blast tore the bus apart.

"Once again the bestial hand of Palestinian terrorism has struck at the heart of Israel," said Mark Sofer, a Foreign Ministry spokesman, adding that Israeli forces had thwarted almost 100 attempted attacks in the past two months.

President Bush denounced the Haifa bombing, saying terrorists would not prevail. "The president condemns in the strongest terms today's attack on innocents in Israel," White House spokesman Ari Fleischer said. "His message to terrorists is that their efforts will not be successful."

British Foreign Secretary Jack Straw urged Israel and the Palestinians to work toward peace. "There is no justification for attacks on innocent civilians," he said. "Attacks like these will not help the Palestinian cause."

Palestinian Cabinet Minister Saeb Erekat condemned "any attack that is targeting civilians, whether Palestinian or Israeli." But he added: "We reject the Israel government finger-pointing that the Palestinian Authority is responsible."