Militants from the radical Palestinian group Islamic Jihad (search) claimed responsibility for a bombing in central Israel that killed a 65-year-old Israeli woman, apparently violating last week's cease-fire pledge.

But Jihad leaders suggested the attack was carried out by renegades and said the group were sticking to the cease-fire.

Israel's foreign minister said his country was still committed to the truce, but the defense minister said Israel would hit back.

Meanwhile, Palestinian Prime Minister Mahmoud Abbas (search) canceled a meeting Wednesday with his Israeli counterpart Ariel Sharon (search) amid mounting friction in his Fatah movement. Many Fatah members say Abbas has not been tough enough in talks with Israel.

There was no word on Abbas' expected visit to the Israeli parliament later this week to lobby for the release of more Palestinian prisoners — an issue that has emerged as a major obstacle to the drive to end 33 months of Mideast violence.

A fax to The Associated Press carrying the Islamic Jihad logo threatened more violence if Israel does not agree to a mass release of Palestinian prisoners. "Release the prisoners or the consequences will be grave," the leaflet warned.

The fax identified the bomber as 22-year-old Ahmed Yehyia from the village of Kufr Rai in the northern West Bank. The village is just south of the West Bank town of Jenin, which is known to be a hotbed of radical militants.

Islamic Jihad's political leader in the West Bank, Sheikh Bassam Saadi, said Jenin-based militants probably staged the attack in order to react to Israel's decision not to release prisoners affiliated with the group. But he stressed that "Islamic Jihad... is committed to the (truce) and it remains so today."

And Islamic Jihad's top spokesman in Gaza, Nafez Azzam, also distanced the group from the claim, saying: "We have no knowledge about the claim of responsibility... and are still committed to this initiative and the truce. ... We stand by our word and our commitments."

Israeli Defense Minister Shaul Mofaz said Tuesday that Israel would continue with peace efforts but had to protect its citizens. "We will continue operating against this infrastructure," he said, referring to the Islamic Jihad.

Israeli police said the Monday blast leveled a house in Kfar Yavetz, an Israeli village near the West Bank, killing the 65-year-old woman who lived there and an unidentified young man, apparently Yehyia. They said the woman was apparently watching television when the bomber slipped in.

The bombing is the first since Palestinian militants declared a cease-fire on June 29; the last Palestinian suicide attack killed 17 people on a bus in Jerusalem on June 11.

Foreign Minister Silvan Shalom said peace efforts would continue despite Tuesday's bombing, but a more deadly attack would torpedo the process.

"We have an opportunity now that we must not miss, which we have to check out thoroughly and see if it is really genuine," he told Israeli army radio. "Today was an attack ... not a huge attack. Tomorrow the same gang will make an attack with 20 dead and the (peace) process will end at that moment."

Dore Gold, an Israeli spokesman, said the attack "only underscores the importance of the Palestinians fulfilling their road map obligations to dismantle the terrorist infrastructure and disarm the terrorist organizations once and for all."

While the truce has been accepted by most Palestinian groups, some renegade groups within Yasser Arafat's Fatah faction have rejected the cease-fire. Last week, one of these groups claimed responsibility for shooting dead a Bulgarian construction worker near the West Bank town of Jenin.

On Monday, Palestinian and Israeli Cabinet members discussed a proposal for Palestinian Prime Minister Mahmoud Abbas to visit Israel's parliament to lobby for a large-scale prisoner release.

Israel's Cabinet approved guidelines on Sunday for freeing several hundred prisoners, but said that members of radical groups like Hamas and Islamic Jihad and anyone involved in attacks on Israelis would not be freed.

Israel holds some 7,000 Palestinian prisoners, according to the International Committee of the Red Cross, and the new measures call for the release of only about 400 prisoners.

The Israeli Cabinet said the move was aimed at strengthening the position of Abbas and his allies who support the cease-fire. But Palestinian officials said the release must be expanded.

At a meeting between Hisham Abdal Raziq, the Palestinian minister of prisoner affairs, Palestinian Justice Minister Abdul Karim Abu Salah and Israeli Justice Minister Yosef Lapid, the three discussed the idea that Abbas could meet with Lapid's Shinui faction in Israel's parliament to discuss the prisoner release. Shinui is the most moderate group within the coalition government.

Palestinian Information Minister Nabil Amr said the Palestinians proposed that Abbas and security chief Mohammed Dahlan meet with Israeli Knesset members. He said Abbas and Yasser Arafat both support the idea.

No date, however, has been set and the Palestinian leaders would be the private guests in parliament of Lapid, said Israeli Knesset spokesman Giora Pordes.