Jerusalem ? A suicide bomber struck a bus Thursday near Prime Minister Ariel Sharon’s Jerusalem residence, killing 10 Israelis and wounding 50 in the deadliest attack in four months and disrupting modest U.S. efforts to restart peace talks.

In an apparent response, about 20 Israeli military vehicles entered Bethlehem early today in an operation that appeared limited to arresting suspects and possibly destroying the house where the bomber lived, in the Aida refugee camp next to Bethlehem.

The blast in Jerusalem blew out the back and roof of the green city bus and sent body parts flying into nearby buildings. Survivors crawled out of broken bus windows. The bombing was only 50 feet from Sharon’s house, but he was away at the time.

The bomber was a Palestinian police officer — causing much chagrin within the Palestinian Authority, which has been under international pressure to use its police force to stop such attacks. The attack coincided with a prisoner exchange between Israel and the Lebanese guerrilla group Hezbollah — a deal questioned by many Israelis.

Before dawn today, Israeli forces instructed Palestinian security officers to abandon checkpoints outside Bethlehem, and troops moved into the town, residents said. Israeli military officials, speaking on condition of anonymity, would say only an operation was in progress.

Security officials said earlier that Sharon and Defense Minister Shaul Mofaz met late Thursday to discuss retaliation options.

Vice Premier Ehud Olmert acknowledged that Israeli reprisals have proven ineffective and has instead said Israel should withdraw quickly from parts of the West Bank and Gaza Strip and impose a boundary on the Palestinians — something Sharon has suggested he would do by June if peace efforts fail.

Israeli Prime Minister Ariel Sharon sits among the families of fallen Israeli soldiers as he attends an official memorial service near Tel Aviv. A blast Thursday on a Jerusalem bus 50 feet from Sharon's home killed 10 people and injured 50 more. Also Thursday, Israel received the bodies of three kidnapped soldiers and secured the release of civilian Elhanan Tannenbaum in a prisoner exchange deal with the militant Lebanese group Hezbollah.