A Palestinian bomber struck outside an Israeli bus station during morning rush hour Sunday, critically wounding two guards and raising tensions following Israel's eviction of settlers from the Gaza Strip (search) and parts of the West Bank.

Palestinian leader Mahmoud Abbas (search) condemned the attack as terrorism and urged Israel to show restraint. It was the first such attack since Israel completed the pullout, and Palestinians linked it to Israel's deadly arrest raid in a West Bank refugee camp last week.

Nearly 12 hours after the attack, an Islamic Jihad (search) official claimed responsibility and said the bomber came from Beit Umar, a village near the southern West Bank city of Hebron.

Israeli media reported that the bomber came from the southern Hebron hills, the section of the West Bank across from Beersheba. After a double bombing killed 16 in the city a year ago, work on a separation barrier along the West Bank in that area was to be speeded up, but the line there remains largely unfortified.

The blast was in a dirt parking lot about 100 yards from the bus station, which was crowded with morning commuters.

The bomber was carrying a heavy bag instead of wearing a vest filled with explosives as most previous attackers have. Witnesses said two security guards halted the bomber, preventing a much larger attack. The guards were critically injured, and Israeli media reported that 46 people were treated for shock.

Taxi driver Itzik Ohana said he was waiting for customers in the lot when he saw the bomber, a man of about 20 with short hair who was dragging a heavy bag and sweating. The man frequently stopped to put the bag down and rest.

Ohana said he told a security guard about the suspicious-looking man and called the police.

"While I was talking to the police there was an explosion," he said.

After the attack, police raised the alert level across the country.

Abbas denounced the bombing as a "terror attack."

"We condemn such attacks. We don't accept them, and we call on everyone to refrain from retaliation," he said.

In a statement, the official WAFA news agency quoted Abbas as linking the bombing to Israel's arrest raid in the Tulkarem refugee camp last week, killing five Palestinians. Abbas said a February truce must be maintained "despite all the Israeli provocations."

Israel demanded action from Abbas.

"Israel has taken the necessary steps to further the prospects of peace with the Palestinians," said David Baker, an official in Sharon's office.

"This bombing ... is another indication that the Palestinian Authority must take proper steps against terror, and without these steps, there will be no progress between both sides."

During Sunday's Cabinet meeting, Defense Minister Shaul Mofaz said the West Bank is becoming the focus for Israel's war against militants. He said Israel has made it clear that the Palestinians must fulfill their pledges to act against violent groups.

Despite the bombing, Israel pushed ahead with arrangements to complete its pullout from Gaza.

The Cabinet approved an agreement with Egypt to post 750 Egyptian border guards along the frontier between Gaza and Egypt. Israel's parliament votes on the accord Wednesday.

Israel has been patrolling the border, trying to prevent Palestinians from smuggling weapons and other contraband through tunnels into Gaza. Deployment of the Egyptian force would allow for an Israeli pullout, expected by the end of the year.

Besides warning that Palestinians could import long-range weapons that could threaten Israel, critics charge that the deal counters terms of the 1979 Israel-Egypt peace treaty demilitarizing Egypt's Sinai desert.

Also Sunday, Israel began transferring 48 graves from the now-empty Gaza settlement bloc to Israel. All the graves were to be moved by the end of the week, the army said.

"This is very difficult for us," Rivka Vinter said as she escorted the body of her husband, Nehemia, who drowned in the Mediterranean 10 years ago, to his reburial in a new cemetery the military built in Nitzan, a new community to house some of the settlers evacuated from Gaza.

"Suddenly we have a rerun of the funeral. It is surreal and I don't know how we will get through this," she told Israel Radio.