Israeli Prime Minister Ariel Sharon (search) threatened Sunday to freeze peace efforts if the Palestinian leadership does not crack down on militant groups after a weekend suicide bombing in Tel Aviv killed four Israelis and wounded dozens.

At a Cabinet meeting, Israel decided to suspend a plan to turn control of five West Bank (search) towns over to the Palestinians and free 400 more prisoners. Those gestures were agreed upon at a Feb. 8 summit in Egypt, where Sharon and Palestinian leader Mahmoud Abbas (search) declared a truce.

The attack and the Israeli measures underlined the fragility of the truce and its vulnerability to violence by extremists who oppose any accommodation.

A familiar pattern appeared in danger of re-emerging: a truce, a Palestinian attack, Israeli retaliation, another Palestinian attack — and ultimately the end of the truce and rekindled violence.

All four of those killed Saturday were at a surprise birthday party. Among them was 28-year-old Yael Orbach, who was giving out wedding invitations to her friends along with her fiance when the bomb went off.

"She was about to marry her beloved. She was full of life, a good soul, always ready to help," her mother, Helen Solomon-Ziebinsky, told Haaretz.

Yaron Grayevsky, who had not yet shown up at the party in his honor at the time of the attack, spent much of the night running between hospitals to check which of his friends were killed and wounded.

Sharon charged that Syria was behind the suicide bombing at a Tel Aviv night spot Friday — the first such attack since Abbas took office in January. Syria denied the allegation.

Islamic Jihad, a Palestinian militant group with leadership in Lebanon and Syria, claimed responsibility Saturday.

At the beginning of the weekly Cabinet meeting, Sharon said Islamic Jihad carried out the bombing on orders from its leaders in Syria, although he held the Palestinian Authority (search) responsible as well.

"There will be no progress politically, and I repeat, no political progress, until the Palestinians carry out a determined campaign to destroy the terrorist groups and their infrastructure," Sharon said.

He warned that if this is not done, "Israel will have to increase its military activities that are meant to protect the citizens of Israel."

A senior military official said on condition of anonymity that Israel would not hit back for the bombing. Shin Bet security service head Avi Dichter said Israel's policy now is to pressure Abbas to crack down on the violent groups.

Sharon told Secretary of State Condoleezza Rice that if Abbas continues to try to control the militants by persuasion, "terrorism will continue ... and Israel cannot accept that," a statement from Sharon's office said.

They had the conversation when Rice called to offer condolences over the bombing, it said. Sharon said talks on the U.S.-backed "road map" peace plan could not begin unless there were "active steps against terrorism."

Palestinian Prime Minister Ahmed Qureia dismissed Sharon's warnings.

"If Israel wants to cut off contacts with the Palestinians, it will be its own decision and we will not cry," Qureia told reporters. "But we say that there is an opportunity begun in Sharm el-Sheik and we want to develop this effort," referring to the summit where the truce was declared.

Relations between Israel and the Palestinians have warmed considerably since Abbas' election last month.

Abbas has deployed Palestinian security forces throughout the Gaza Strip to prevent militants from firing rockets on Israel and brokered a temporary agreement with the militant groups to halt attacks. In response, Israel released 500 Palestinian prisoners, promised to end killings of militant leaders and agreed to hand over security control of five West Bank towns to the Palestinians.

After Friday's attack, Israel froze plans for the security handover because it no longer believes the Palestinian security forces are capable of controlling the towns — a decision criticized by Qureia.

Israel also put on hold the release of 400 more prisoners, Cabinet minister Tzipi Livni said, adding that their release was contingent on Palestinian moves to halt violence.

"Only when we see what happens in the Palestinian Authority will we come back to the (prisoner) issue," she told Israel television.

The prisoner issue is a volatile and emotional one for the Palestinians, who may judge Abbas' performance on his ability to win their freedom. Israel, however, refused to release prisoners directly involved in violence.

Meanwhile, Israeli Foreign Minister Silvan Shalom summoned ambassadors from the European Union and U.N. Security Council members to a Monday meeting, where he said military intelligence would display proof of Syrian involvement in the Tel Aviv bombing. The Foreign Ministry said it would not make the proof public.

Syrian Foreign Minister Farouk al-Sharaa denied Syria was involved in the attack.

Vice Premier Shimon Peres said Syrian President Bashar Assad was responsible because the orders came from his country.

"He has to decide which world he belongs to — the world of terrorism or the world that fights terrorism," Peres told Army Radio.

Israel and the United States have demanded that Syria close the headquarters of Palestinian militant groups there and end support for other militant organizations.

Israeli military officials said Sunday they received information a month ago that the cell behind Friday's bombing was planning an attack and passed it along to Palestinian officials, who did nothing.