The blast ripped off the roof of the No. 37 bus, strewing wreckage and body parts across the street. Witnesses said the explosion occurred just after the bus stopped in the hilltop neighborhood Carmelia at about 2:17 p.m. Officials said because of the hour, the bus would have been packed with students from the nearby University of Haifa. 

There was no immediate claim of responsibility for the blast, which comes as Israel's new hardline government is pressing ahead with a two-week-old offensive against Hamas militants in Gaza, and as the Palestinian Authority is considering far-reaching reforms. 

In the past Israel has reacted with tough military measures after such attacks and has blamed Yasser Arafat, saying the Palestinian Authority does nothing to prevent terrorism. 

"Once again the bestial hand of Palestinian terrorism has struck at the heart of Israel," said Mark Sofer, a Foreign Ministry spokesman, adding that in the past two months Israeli forces had thwarted almost 100 attempted attacks. 

Palestinian Cabinet minister Saeb Erekat condemned "any attack that is targeting civilians, whether Palestinian or Israeli. But he added: "We reject the Israel government finger-pointing that the Palestinian Authority is responsible." 

Haifa police chief Yaacov Borovsky said the explosion was caused by a suicide bomber, and 14 were killed, according to rescue officials. 

Avi Zohar, a rescues services spokesman, said there were "dozens of casualties, among them at least two dozen seriously injured. Some of the wounded were being treated at the scene, and others were evacuated. 

"I suddenly heard a huge explosion and all the lights in my beauty parlor broke," said beautician Ronen Levy. "I am still in shock." 

Ovadia Saar, who was driving another bus just behind the one that was attacked, said he saw "the back of the bus fly into the air, and the windows blew out and a great cloud of dust covered the bus." 

"I got out and ran toward the bus. It was a horrible sight. There were a few bodies in the street," he said. "Those we saw breathing we evacuated." 

The blast toppled some palm trees and left the bus a skeleton of charred and twisted metal. Cars that were parked nearby were also damaged in the blast, and some passers-by were among the injured. 

Israeli police went on alert throughout the country amid warnings that more attacks were planned, reports said. 

The Haifa blast was the first terror attack in Israel since Jan. 5, when a pair of suicide bombers killed 23 people in Tel Aviv. 

Abdel Aziz Rantisi, a spokesman for the Islamic militant Hamas, praised the attack but did not claim responsibility. "We will not stop our resistance," he said. "We are not going to give up in the face of the daily killing" of Palestinians. 

The attack comes days after the establishment of a new, right-wing government in Israel. Some of the key Cabinet ministers have in the past called for Arafat's expulsion. 

It also coincides with a two-week-old Israeli military offensive against Hamas strongholds in the Gaza Strip in which dozens of Palestinians have been killed, including some civilians. 

Arafat, meanwhile, is considering appointing a prime minister in coming days - a move that has been demanded by the United States and Israel as a means of sidelining the veteran Palestinian leader. 

"We are facing a (Palestinian) leadership which at best is unwilling to act, and at worst is actually complicit in many of the terrorist activities that we see," Sofer said. "What we see is terror, slaughter of innocent children, people going about their daily lives." 

Earlier Wednesday, Israeli soldiers demolished the home of a suspected suicide bomber in the West Bank and removed the remains of a neighborhood mosque on the Gaza-Egypt border. 

Soldiers leveled the home of suicide bomber Ashraf Saed in the West Bank town of Nablus, leaving nine homeless, the army said. Saed died in an Aug. 8 attack that injured an Israeli soldier at a West Bank checkpoint. 

In the Rafah refugee camp in Gaza, meanwhile, troops knocked down a neighborhood mosque that had been seriously damaged in previous strikes. 

The U.S. government protested the intensifying Israeli operations, which have led to several civilian casualties. 

"We have concerns about actions that go beyond and that bring harm to the innocent, including innocent Palestinians," White House spokesman Ari Fleischer said on Monday. 

Israel stepped up its raids into Gaza after a Feb. 15 attack, in which a bomb blew apart an Israeli tank, killing four soldiers. Hamas claimed responsibility for the bombing.