Mayhem and murder by Palestinian bulldozer driver kills 3

At least three people were killed and 45 wounded in the attack, officials said, as the driver zigzagged into his targets for 600 metres, mostly on the city's main thoroughfare, Jaffa Road.

Shahar Ayalon, Israel's deputy police commissioner, said it was "definitely a terrorist attack" while neighbours of the assailant, Hussam Tarysir Dwayat, in east Jerusalem said they knew of no links between him and any armed Palestinian factions.

Three Palestinian groups claimed responsibility for the attack, including the armed wing of Fatah, but Dudi Cohen, the Israeli national police chief, said it looked like "a spontaneous act".

Footage captured the bulldozer crushing a vehicle and an off-duty soldier shooting the perpetrator in the head several times at point blank range as onlookers screamed.

David Huweida, 51, watched the rampage from his sweet shop. "I saw the bulldozer ploughing into cars, ploughing into the bus station to run over pedestrians," he said.

"He lifted people with his shovel. He lifted a man and tried to crush him but didn't succeed. He ploughed into a bus but didn't succeed in turning it over. But the next bus he reached, he overturned. People climbed up on the bulldozer and tried to stop him. They wounded him and we thought it was over. But then it was as if he became resuscitated and he continued."

Gedalya Sabiner, a paramedic, treated the wounded on the scene and helped as workers pulled the body of a woman from a crushed vehicle. "I think she was in her thirties. I saw a baby carriage in the car."

Wounded people sat dazed on the ground amid broken glass and bloodstains. A silver car's roof had been torn and its windscreen smashed, while a grey vehicle near the Caterpillar bulldozer that had been used was crushed. Signs along Jaffa Road had been felled and the roof torn off a bus shelter.

A Chevrolet car was turned on its side. Further along, the front of a white Citroen van, whose driver was killed, was flattened.

Eli Mizrachi, an officer in an anti-terror unit, said he and his partner sped to the scene on a motorcycle. An off-duty soldier had just shot the attacker but not killed him.

"I ran up the stairs (of the vehicle] and when he was still driving like crazy and trying to harm civilians I fired at him twice more and that's it, he was liquidated."

Mr Ayalon, the deputy police commissioner, said of the assailant: "He was working as a tractor operator. He was not a madman."

Saeb Erekat, an aide to Palestinian president Mahmoud Abbas, condemned the attack. But Sami Abu Zuhri, a Hamas spokesman, said: "We consider it a natural reaction to the daily aggression and crimes against our people in the West Bank and all over the occupied lands."

At the assailant's home in Sur Bahir, police drove away in jeeps after questioning relatives.

A female relative dressed in black came out and called out: "May God have mercy on him. He is a martyr, God will have mercy."

Rateb Shehadeh, 60 , a neighbour said: "No one knows what happened to him, no one knows why he did this. He was married and had two children, aged five and seven. Dwayat had been married to a Russian Israeli woman, had divorced her, and remarried a Palestinian Muslim, Mr Shehadeh said.

"I know that the Russian woman complained against him and that he went to prison. I don't know exactly what the problem was between them.

"No person can agree to what he did. We condemn the murdering of people in cold blood, whether they are Arabs or Jews. It is rejected.

"As far as I know he was not part of any organisation. He was a quiet person and his secret died with him."

Yusuf Hamid, a relative, said the attack reflected "psychological pressures" on Palestinians.

Prisoners swap hope as exchange is agreed

LEBANON'S Hezbollah said last night it had agreed to a UN-mediated deal to exchange prisoners with Israel and expected the swap to take place around the middle of this month.

"We have accepted this agreement and consider it a great accomplishment," said Sayyed Hassan Nasrallah, leader of the group.

The exchange should take place around 15 July or "a little before or a little after", Nasrallah said.

Under the deal, Hezbollah will return two Israeli soldiers whose capture on 12 July, 2006, triggered a 34-day war with the Jewish state. They are believed dead.

The Jewish state will hand over five Lebanese prisoners and the remains of around 200 Lebanese, Palestinians and other Arabs who infiltrated northern Israel.

The prisoners include Samir Qantar, the most prominent Lebanese held by Israel. He was serving a life sentence for killing a man and his four-year-old daughter in a 1979 raid on the town of Nahariya.

Israeli prime minister Ehud Olmert had described Qantar as the last "bargaining chip" for word on the fate of Israeli air force navigator Ron Arad, who bailed out of his plane during a raid in 1986.

Nasrallah said the group would hand over a report on Arad's fate in a day or two.