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Bombing doesn't stop exchange

A Palestinian police officer detonated a bomb packed with shrapnel aboard a bus Thursday morning, killing himself and 10 others. Despite the attack, Israel proceeded with a planned prisoner exchange with the Lebanese guerrilla group Hezbollah.

In an apparent retaliatory move, about 20 Israeli military vehicles early today entered Bethlehem, which is near the home of the suicide bomber.

The bombing wounded more than 45 people and sprayed body parts into living rooms steps from Prime Minister Ariel Sharon's official residence at the edge of central Jerusalem. It was the deadliest Palestinian attack in almost four months.

Within four hours, and with what one Israeli spokesman called "heavy hearts," Israeli officials went ahead with the planned release of 400 Palestinian prisoners across five checkpoints into the West Bank and the Gaza Strip.

Israel also released 29 other men, most of them Lebanese, in a German-mediated deal that returned to Israel a businessmen kidnapped by Hezbollah and the remains of three soldiers ambushed by the group while on patrol in October 2000. It was a rare, delicate exchange, negotiated over years, between enemies who do not officially recognize each other.

Scenes of jubilation in Lebanon contrasted with a somber ceremony to receive the soldiers' remains Thursday evening at Ben Gurion International Airport.

At a mass rally in Beirut that Hezbollah staged to welcome the freed Arabs, the group's leader warned it would kidnap more Israelis to use as bargaining chips if necessary to secure the release of Lebanese prisoners.

In Israel, the businessman, Elhanan Tannenbaum, was whisked out of public view for medical examination and questioning by Israeli security.

Tannenbaum, a colonel in the Israeli army reserves who was held captive in Lebanon for more than three years, had a short reunion with his family before being taken for a medical checkup in police custody. There were concerns in Israel he may have given state secrets to Hezbollah.

In Jerusalem, the bomb tore off the back third of the roof of a bus as it climbed Gaza Street in the wealthy Rehavia neighborhood.

Al-Aqsa Martyrs' Brigade, a violent offshoot of Yasser Arafat's Fatah faction, claimed responsibility for the suicide bombing. It identified the bomber as Ali Muneer Jaara, a Palestinian police officer from a refugee camp in Bethlehem, just south of Jerusalem.

Jaara, who was to turn 25 today, left a one-page handwritten note saying he wanted to avenge the deaths of eight Palestinians killed Wednesday in an Israeli incursion into the Gaza Strip. Asking his mother not to cry for him, he wrote, "Be happy for the wedding of your son the martyr."

Israeli security officials said that, despite the recent appearance of a relative calm for Israelis, militants have continued attempting attacks. Since September, Israeli security had foiled at least four attempted bombings in Jerusalem, the police said.

Blocking the prisoner release might not have proved unpopular among Palestinians, who generally did not regard it as significant. None of the freed Palestinians were prominent men, and most were due to be released shortly anyway. Israel still holds roughly 6,000 Palestinians prisoner.

Sharon canceled a meeting planned for Thursday between Israeli and Palestinian officials and representatives of donor countries. The group was to discuss how to improve conditions for the Palestinians.

_ Information from the New York Times and Associated Press was used in this report.