An Israeli woman was killed and 11 people wounded on Monday in a suicide bombing claimed by Palestinian militants at a shopping centre in the desert town of Dimona, the first such attack in a year.
Medics said one suicide bomber was killed in the blast and a second was killed by police shortly after the explosion that rocked the mall in Dimona, site of Israel's top secret nuclear reactor.
It was the first suicide bombing on Israeli soil since the relaunch of Israeli-Palestinian peace talks at a US conference in November and the first since January last year.
The Al-Aqsa Martyrs Brigades, a group loosely linked to Palestinian president Mahmud Abbas's Fatah party, claimed joint responsibility with two other groups.
And the Palestinian Hamas movement which rules the Gaza Strip called the attack a "heroic act" and a "natural response to occupation crimes."
The Magen David Adom medical rescue services said in a statement that the blast killed one civilian and wounded 11, including one seriously, while a police officer told Israeli radio that the dead victim was a woman.
An unexploded bomb belt was found at the site of the blast, which ripped through the shopping mall in the town in the Negev desert at 10:30 am (0830 GMT), Magen David said.
"Israel will continue to fight terrorism by all necessary means," foreign ministry spokesman Arye Mekel told AFP.
"Terror organisations have again shown their true face and just like the indiscriminate rocket fire against southern Israel, they strike civilian population centres with the intention of killing innocent civilians in shopping centres and residential areas."
The attack came after a near two-week breach of the border between Egypt and Gaza which saw hundreds of thousands of people pouring into Egypt from the impoverished Hamas-run territory in a bid to break a crippling Israeli siege.
Israeli authorities have voiced concern that militants could have entered the country through its porous 250-kilometre (150-mile) border with the Egyptian Sinai peninsula.
The Sinai had now become the "soft belly of Israel's security because terror organisations have transferred dozens of terror activists there," the head of Israel's domestic intelligence agency Shin Beth told the cabinet on Sunday.
"The Shin Beth has identified at least 30 routes to penetrate Israel from the Sinai into the Negev," a senior official quoted him as telling the cabinet.
In January last year, a Palestinian suicide bomber blew himself up in a bakery in the Red Sea resort of Eilat, killing three people in the first such attack in the Jewish state in nine months.
That attack was claimed jointly by Palestinian militant groups Islamic Jihad and the Al-Aqsa Martyrs Brigades.
In April 2006, 11 people were killed in Tel Aviv in a suicide bombing also claimed by Islamic Jihad, in the midst of deadly factional fighting between Fatah faction and the rival Islamist movement Hamas.
Israel has been wracked series of suicide bombings that peaked after the Palestinian uprising broke out in 2000, but the number has dropped off sharply since 2005.
Peace talks were revived amid great fanfare at the US conference in Annapolis, Maryland, but have since faltered over Israeli expansion of settlements in occupied Palestinian territory and its actions against the Gaza Strip.
Israeli Prime Minister Ehud Olmert is due to address parliament later on Monday.
Israel is widely believed to be the only nuclear power in the Middle East with around 200 nuclear warheads but has a policy of neither confirming nor denying its arsenal.
The Jewish state has refused to sign the nuclear Non-Proliferation Treaty or allow international surveillance of Dimona.
The modern town of Dimona was established in the 1950s as a dormitory centre centre for workers of the nearby Dead Sea works.