Palestinian police marched in formation back into the West Bank town of Bethlehem today after Israeli troops pulled out as part of the US-backed road map to peace.

Palestinian police were preparing to move back into the West Bank town of Bethlehem today, the second area Israel is turning over under a Middle East peace plan, following an upbeat summit meeting that boosted hope for an end to 33 months of bloodshed.

The US-backed road map to peace in the Middle East was in crisis tonight after a suicide bomber killed at least 17 on a Jerusalem bus and seven Palestinians were killed by Israeli air strikes in Gaza City.

Several people have been killed in an explosion in Jerusalem city, according to reports.