A BUS has exploded in the heart of Jerusalem, wounding at least 15 people and raising fears of a return to the Palestinian suicide attacks that ravaged Israeli cities a decade ago.

Police officials initially called the blast a terrorist attack, but later said all options are being examined. The fact that the bus was empty at the time of the explosion lowered the chances of it being a deliberate attack.

The blast comes as jittery Israelis prepare for the Passover holiday amid a wave of Palestinian attacks, mostly stabbings. Over the last seven months 28 Israelis and two Americans have been killed in Palestinian attacks, while at least 189 Palestinians have been killed. Israel says most of the dead were attackers, with the rest killed in clashes with troops.

The Magen David Adom rescue service says 15 people have been wounded, including two seriously.

Images showed fire and large plumes of smoke billowing from the back of the bus, leaving just a charred skeleton. The wounded appeared to have been in an adjacent bus that was also damaged.