A terrorist attack was foiled yesterday morning when a large explosive charge was found and diffused in Kafr Qasem. Police captured two 21-year-old Tanzim activists from Nablus - a suicide bomber who brought the explosives and his guide.

The bomber had intended to blow himself up in the crowded Petah Tikva market, which could have caused many casualties, police sources said.

The two suspects, both members of the Tanzim's Al Aqsa Brigades, were caught due to accurate intelligence information. Defense establishment sources expressed concern over the fact that the bomb was made of standard explosives, which cause much greater damage than nonstandard explosives.

"It is not difficult to guess what the results of this bombing would have been had the bomber reached his destination," a senior security source said.

The bomb was discovered a few hours after a high alert was declared, following the Shin Bet's tip to the police at about 7:30 A.M. that two terrorists had entered Israel in the area of Petah Tikva, Rosh Ha'ayin and Kafr Qasem.

Large police and border police forces started combing the area, accompanied by a police helicopter. Police road blocks caused huge traffic jams in the entire region.

"The intel was very detailed, so we knew we were looking for a large, young man wearing shorts and a black shirt with yellow sleeves," Chief Superintendent Eretz Yefet said.

Yefet and his men drove around Kafr Qasem in jeeps. At the fourth square on the main street, they turned right and went into a small street. "Suddenly we saw on the left a large man with shorts and a black and yellow shirt, walking peacefully with a backpack. In fact, he looked like a north Tel Avivian on the way to the beach. We suspected he might be our man and apprehended him, believing he was carrying the explosive," Yefet said.

The police took the bag away from the suspect, searched him and found two batteries. "Then we realized something was wrong. We made him open his bag and, to our surprise, he did so readily, showing us that there were only clothes inside. But, at the same time, some of us found another bag, of blue cloth, hidden nearby between a garbage container and a pole," Yefet said.

When the policemen told him to open the second bag, the suspect adamantly refused, saying it belonged to a friend, who apparently fled as soon as he saw the police jeep approaching.

"We insisted and pressured him to open it. He remained calm but refused to touch the bag," Yefet said.

While the policemen waited for the sappers to arrive, the second suspect was arrested nearby. The first suspect admitted at the beginning of his interrogation by the Shin Bet and the police that he was the suicide bomber.

The sappers exploded the blue bag a little after 10 A.M. and the sound of the explosion was heard over a great distance.

The two suspects apparently did not receive any help from Kafr Qasem. The investigation also indicates that the suicide bomber brought the explosives from the territories.

The explosion formed a large crater, about a meter deep, by the roadside. It damaged the road and nearby houses, shattering windows and doors and tearing out shutters.

A number of Kafr Qasem residents complained yesterday that the police did not bother to evacuate people from their homes before blowing up the bomb. They said many of their homes and cars were damaged.

The residents were not surprised by the suicide bomber's entrance to the seam-line township. "It's no problem to get here, they come by foot. The passage from the territories is open," complained council head Sami Isa. He was referring also to other residents of the territories, who have been entering the township freely and increasing the crime rate, according to police.

Many residents complain of beggars and vendors from the territories, whom they regard as a nuisance.

Kafr Qasem's security chief, Ali Badir, heads a volunteer force that is trying to get rid of Palestinians from the territories. Badir said dozens of residents asked him yesterday to speed up setting up a local civil guard to stop the Palestinians from entering.

Fatah was considered until now less advanced in dealing with explosives, compared to Islamic organizations, and the use of standard explosives surprised the defense establishment. Defense sources said the bomb may have been provided by Hamas or Jihad, noting that activists of various organizations sometimes arrange a suicide bombing jointly.