Hamas claims deadliest attack in Israel in 2 years

Israel said Abbas should do more to rein in militants. Yet Abu Dhaim, who was in his early 20s, lived in Jerusalem, which is under full Israeli control. Arab residents have open access to Jewish parts of the city and the rest of Israel.

"If Israel really wants to solve all these problems, Israel must look to the negotiations," said Abbas aide Nabil Amr.

Israel deployed thousands of police in Jerusalem and limited Palestinian access to prayers at the al-Aqsa mosque, Islam's third holiest site.

At a funeral ceremony at Merkaz Harav, Danny Spiegel blamed Olmert's government. "We feel the government is not helping us, is not making us feel secure here in Israel."

Rice told Abbas by telephone on Friday that her efforts to reach a "calm as soon as possible" with Israel would continue, an Abbas aide said.

Washington wants Egypt to broker a deal under which Hamas and other Gaza militants would stop firing rockets. Israel would, in turn, halt its attacks on the enclave, which it says it has conducted only to try to halt the rocket attacks.

Washington has also pressed Israel to ease travel restrictions on Palestinians in the West Bank. Though the Jerusalem attacker did not come from there, the killing makes that less likely to happen soon.

Israel has yet to meet its own commitments under a long-stalled peace "road map" to halt all settlement activity and to remove Jewish outposts in the occupied West Bank.

(Additional reporting by Nidal al-Mughrabi in Gaza, Alastair Macdonald in Jerusalem and Mohammed Assadi in Ramallah; Editing by Mark Trevelyan)