In the first major security challenge of Israeli Prime Minister designate Ehud Olmert's stint in office, a suicide bomb exploded in a busy commercial district of Tel Aviv on Monday. Striking on the Jewish holiday of Passover, the bomb killed nine, including the bomber, and wounded at least 49. The blast occurred in the early afternoon -- just hours before the new Israeli parliament, elected in late March, was to be sworn in -- in front of the busy restaurant "The Mayor's Falafel." It was the deadliest Palestinian attack in over a year.

While Palestinian President Mahmoud Abbas rushed to condemn the bombing, Hamas, which heads up the Palestinian government following general elections in late January, said the attack was a legitimate response to Israeli "aggression." "We think that this operation … is a direct result of the policy of the occupation and the brutal aggression and siege committed against our people," said Khaled Abu Helal, spokesman for the Palestinian Interior Ministry, which is controlled by Hamas.

Responsibility for the attack was claimed by Islamic Jihad in a phone call to the Associated Press. While Hamas has observed a year-long truce, Islamic Jihad has been responsible for a number of recent attacks. The Israeli government said it is ultimately holding Hamas responsible for the Tel Aviv bombing, accusing the group of supporting other terrorist organizations. "From our point of view, it doesn't matter if it comes from Al Aqsa, Islamic Jihad or Hamas," said Israeli Foreign Ministry spokesman Gideon Meir according to the AP. "They all come out of the same school of terrorism led by Hamas."

Prime Minister Olmert said that Israel would take the appropriate response to the attack. A meeting of Israeli defense heads was scheduled for later Monday to consider the country's reply.

The restaurant in the Neve Shaanan district of Tel Aviv was packed when a security guard reportedly stopped a man from entering. The bomb went off when he was checking the man's bag. The guard had been hired after a suicide bomber targeted the restaurant on Jan. 19 in an attack which wounded 20.

"I saw a young man starting to open his bag," witness Moussa al Zidat told the AP. "The guard begins opening the bag, and then I heard a boom."

According to police reports, nine of the wounded are in serious condition with the rest being treated for moderate to light injuries. The White House immediately condemned the attack. Press Secretary Scott McClellan called it "a despicable act of terror for which there is no excuse or justification."

The attack is likely to put even more pressure on an already tense situation  since Hamas rose to power in the Palestinian Authority. Israel has cut off all negotiations with the Palestinians so long as Hamas -- considered a terror group by Israel, the US and the European Union -- refuses to revoke parts of its charter which call for Israel's destruction. The European Union recently cut off all aid  to the Palestinian government, but is continuing to support health care, education and other humanitarian projects. Before the freeze, the EU supported the Palestinians to the tune of some €500 million a year.