A blast ripped through a bus in Tel Aviv on Wednesday injuring 17 people in what Israel said was a terrorist attack, further vexing international efforts to end relentless violence in and around Gaza.
The attack came as US Secretary of State Hillary Clinton and UN chief Ban Ki-moon shuttled between Jerusalem and Ramallah trying to secure a halt to the week-long conflict in which 147 Palestinians and five Israelis have died.
Soon after the bus blast, Israel launched fresh air strikes on Gaza City, killing six Palestinians in attacks which raised the day's toll to 10, medics said.
One of the strikes hit the building housing AFP's Gaza City offices for the second time in 24 hours, killing a toddler in the block next door, a health ministry spokesman said.
No AFP journalists were in the building at the time.
The strike came shortly after the Tel Aviv blast, which occurred very close to the Israeli defence ministry, the Kiriya.
"A bomb exploded on a bus in central Tel Aviv. This was a terrorist attack," Prime Minister Benjamin Netanyahu's spokesman Ofir Gendelman said on his official Twitter account.
Of the 17 wounded, one was in moderate to serious condition while another three sustained moderate injuries, Israel's emergency services said.
Television images showed the bus with its windows blown out and its metal frame contorted from the force of the blast, in images reminiscent of scenes from the second Palestinian intifada, from 2000 to 2005.
Condemnation poured in from around the world, with Washington branding it a "terrorist attack," and Moscow denouncing it as a "criminal terrorist act."
France and Germany meanwhile both called for an urgent and lasting ceasefire to end the bloodshed.
Just before the explosion, the UN chief had called for an immediate halt to militant rocket attacks on Israel after talks with Palestinian leader Mahmud Abbas in the West Bank city of Ramallah.
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"I reiterate my call for an immediate cessation of indiscriminate rocket attacks by Palestinian militants targeting Israeli populated centres. This is unacceptable," Ban told a news conference.
"Now is the time for diplomacy and stopping the violence," he said after a week of deadly Israeli air strikes on Gaza which have killed more than 145, as militants fired more than 1,300 rockets over the border, killing five Israelis.
Abbas had earlier held talks with Clinton, with a senior official saying he had expressed hope that a truce would be announced by the end of Wednesday, while the US diplomat was still in the region.
"The secretary of state assured president Abbas that the United States has done everything possible to reach a ceasefire," said Palestinian negotiator Saeb Erakat.
Before leaving for Egypt, Clinton returned to Jerusalem for more talks with Netanyahu in their second meeting since her arrival late on Tuesday.
On landing in Cairo, Clinton went straight into talks with Egyptian President Mohamed Morsi, who is playing a key role in mediating a ceasefire deal between Israel and Gaza's Hamas rulers.
Speaking ahead of the bus blast, Israeli government spokesman Mark Regev told AFP that the Jewish state still hoped for a diplomatic solution.
"The diplomatic ball is still in play. We have not given up on the hope of having a long-term solution achieved through diplomacy, I hope it's still possible," he said.
Overnight, the military said it had targeted more than 100 sites across Gaza Strip, one of which was the building housing AFP's Gaza City office, which was damaged but caused no injuries.
The building was targeted again on Wednesday, with a missile slamming into the seventh floor, killing a toddler of around two years in the next door building, officials said.
There was no immediate comment from the Israeli military.
Israel launched its offensive on November 14 with the targeted killing of a Hamas military chief. Since then, 147 Palestinians and five Israelis have been killed.