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Israeli troops in the area between Jenin and Tul Karm yesterday found and destroyed a booby-trapped car believed to have been assembled by the Islamic Jihad cell behind Friday's suicide bombing in Tel Aviv.

The car bomb was neutralized in a controlled explosion by sappers. The vehicle was carrying more than 200 kilograms of explosives and the investigation now is trying to determine whether it was planned for use inside Israel or against Israeli targets in the West Bank.

Meanwhile, Islamic Jihad leaders in Damascus, who initially denied involvement in the Tel Aviv attack, reversed themselves yesterday and accepted responsibility. Islamic Jihad official Mohammed Hindi told Associated Press Television News that the attack was the work of a small cell acting on its own. "The Islamic Jihad's policy has not changed. We are still committed to the period of calm, which we agreed to with Abu Mazen," he said. Abu Mazen is the name used by Mahmoud Abbas, the Palestinian Authority chairman.

But Israel was insisting the attack was the work of the Islamic Jihad leadership, not simply a rogue cell.

"According to our information, the orders to bomb the place in Tel Aviv came from Damascus," Vice Premier Shimon Peres said.

Ambassadors from the European Union member states and the Security Council members were called to the Foreign Ministry in Jerusalem yesterday for a briefing on the evidence Israel has proving Islamic Jihad was behind the Friday terror attack in Tel Aviv.

Defense sources said after the briefing that Islamic Jihad in Damascus was encouraging its people in the territories to conduct terror attacks, even though formally, Islamic Jihad has reportedly accepted the "lull" in violence worked out with the Palestinian Authority.

Brig. Gen. Yossi Kupperwasser, who briefed the ambassadors, said the PA would not act against terror groups, and that the identity of the cell members was known to the PA security services. He presented the evidence proving the Syrian involvement and the PA's failure to act.

While that briefing was underway in Jerusalem, defense, legal and diplomatic officials from Israel headed to Washington, London and Paris to brief their counterparts on Israel's case against the Syrians.

According to Foreign Ministry director general Ron Prosor, Islamic Jihad and Hezbollah are working to break up the cease-fire Abbas worked out with the armed groups in the territories.

"I think the world is quite aware. We have to give a little bit more detail, but it's not only the only wrong Syria is perpetrating," Peres said.

The Syrian government has strongly denied any connection to the blast.

"This issue is untrue and baseless," said Syrian Interior Minister Ghazi Kanaan and in a rare interview to the Western press, Syrian President Bashar Assad told the Italian newspaper La Repubblica that Syria had nothing to do with the bombing - and expressed concern that the U.S. was gearing up to attack Syria the way it attacked Iraq.

Asked about the accusations that Syria was involved in the bombing, Assad said: "It's a pointlessly offensive accusation. Syria has nothing to do with it."

Palestinian officials say the local Islamic Jihad cell behind the bombing was freelancing for Hezbollah, which has a long record of financing Palestinian attacks on Israel.

Palestinian Interior Minister Nasser Yousef was in the bomber's northern West Bank hometown on Sunday to personally investigate the situation, and Izzedine al-Sharif, the local governor, said all tracks lead to Hezbollah. "This attack has nothing to do with Islamic Jihad or Hamas. It was funded from outside," he said.

National Security Council head Giora Eiland declared yesterday that "the true test of the Palestinians will not be in their words." Eiland asked if the Palestinians would put suspects on trial. "The word democratization, in which people take so much pride, is not only a function of elections," he said. "It is comprised of several additional factors, and, from this standpoint, the attitude toward acts of murder is perhaps the first."