A homicide bomber struck a bus near Prime Minister Ariel Sharon's (search) Jerusalem residence Thursday, killing 10 Israelis and wounding 50 in the deadliest attack in four months and disrupting modest U.S. efforts to restart peace talks.

In an apparent retaliatory move, about 20 Israeli military vehicles early Friday entered Bethlehem (search), which is near the home of the homicide bomber.

The blast in Jerusalem blew out the back and roof of the green city bus and sent body parts flying into nearby buildings. Survivors crawled out of broken bus windows. The bombing was only 50 feet from Sharon's house, but he was away at the time.

The bomber was a Palestinian police officer from the outskirts of Bethlehem — causing much chagrin within the Palestinian Authority (search), which has been under international pressure to use its police force to stop such attacks. The attack coincided with a prisoner exchange between Israel and the Lebanese guerrilla group Hezbollah (search) — a deal questioned by many Israelis.

Before dawn Friday, Israeli forces instructed Palestinian security officers to abandon checkpoints outside Bethlehem, and troops moved into the town, residents said. Israeli military officials, speaking on condition of anonymity, would say only an operation was in progress.

Security officials said earlier that Sharon and Defense Minister Shaul Mofaz met late Thursday to discuss retaliation options.

Vice Premier Ehud Olmert (search) acknowledged that Israeli reprisals have proven ineffective and has instead said Israel should withdraw quickly from parts of the West Bank and Gaza Strip and impose a boundary on the Palestinians — something Sharon has suggested he would do by June if peace efforts fail.

"Terror has ... continued without any relation to the strength of our response," Olmert said.

Sharon charged that the Palestinian Authority, headed by Yasser Arafat (search), "does not lift a finger to remove the scourge of terrorism from its midst."

The homicide bomber, 24-year-old Ali Jaara from a West Bank refugee camp, blew up a 15-pound bag of explosives on Jerusalem city bus No. 19 just before 9 a.m. At the time, the bus was passing Sharon's house in the Rehavia district of downtown Jerusalem.

Passenger Svetlana Minchiker, in her 30s, said she was talking on her cell phone as the blast went off. "At first I did not see anything except my hands," she said, holding up one hand still red with blood. A trickle of dried blood marked her left cheek.

"As my feelings slowly returned to me, I managed to ... crawl through the window."

The bombing was the deadliest since a homicide bomber killed 21 people at a seaside restaurant in Haifa on Oct. 4. The most recent bombing in Israel was a homicide attack at a bus stop outside Tel Aviv on Dec. 25 that killed four people.

Thursday's bomber, Jaara, was a member of the Palestinian police and was sent by the Al Aqsa Martyrs' Brigade, an armed group with ties to Arafat's Fatah movement.

Palestinian Prime Minister Ahmed Qureia appealed "to all parties to stop this bloody series of violence," referring also to the deaths of eight Palestinians in an Israeli incursion into Gaza City on Wednesday. Five of the eight were armed men killed in gun battles with soldiers.

The attack disrupted a visit by two senior State Department officials, David Satterfield and John Wolf, who were trying to persuade Qureia to meet with Sharon as a way of restarting the stalled "road map" peace plan. The envoys were at Israel's Defense Ministry when the bomb went off.

Satterfield and Wolf proposed hosting a meeting with Israeli and Palestinian officials later Thursday to discuss the humanitarian crisis in the Palestinian areas. But Sharon canceled the meeting after the blast.

Palestinian officials said the U.S. envoys came empty-handed, and that there were no expectations they would produce a breakthrough.

In the refugee camp of Aida, on the outskirts of Bethlehem, the bomber's distraught parents said he was a quiet and devout Muslim who showed little interest in politics. Jaara left a note saying he was avenging those killed in Gaza a day before.

Jaara's father, Munir, said his son was the only breadwinner in a family of 11, and had been hoping to start a family. "I was expecting to marry him, not to bury him," the father said.

Jaara's mother sat on a mattress on the floor, crying. She carried a picture of her son in a police uniform with his police-issue assault rifle.

The Palestinian attacks are "really bad for us. They only hurt us," said his 26-year-old sister, Ola.

The bombing could undermine the Palestinians' campaign against the separation barrier Israel is building in the West Bank. The International Court of Justice is to hear arguments on Feb. 23 over the legality of the barrier, which the Palestinians say grabs land they want for a state.

Sharon's spokesman, Raanan Gissin, said the attack underscores the need for the barrier to keep out assailants. "No one has the right to question us and bring us to court on how to defend ourselves," he said.