Fear grips heart of downtown Jerusalem

Businesses are defiant despite 20 attacks in two years ­ but customers are staying away

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Israel attacked by first female suicide bomber

The suicide bombing that killed one Israeli and injured 140 people in Jerusalem yesterday was the latest in a series of attacks that have devastated business in the city centre.

Among those hurt was Mark Sokolow, 43, a New York lawyer who survived the 11 September attacks. He was visiting a daughter who is studying in Jerusalem and had just left a shoe shop with his wife and two younger daughters when the bomber blew herself up. "I heard a 'woosh', then a bang and things started flying all over," said Mr Sokolow, recovering from minor wounds in nearby Bikur Holim hospital.

Mr Sokolow, who is Jewish, was in his office on the 38th floor of the second tower of the World Trade Centre when the first tower was hit. He escaped by running down the stairs. He said he and his family were not afraid to come to Israel. They had even cancelled a holiday elsewhere. "We felt it was more important than ever to come here," he said. "We wanted to show people that they shouldn't stop visiting Israel."

Another man who had a narrow escape was Yitzhak Mizrahi, 48, a bus driver who had just picked up passengers 15 yards from the site of the bombing. "I stopped at a red traffic light," he said. "I saw someone run out of an alley towards the shops, then I heard a huge bang and saw a ball of fire. If the light hadn't been red, my bus would have been hit."

The suicide attacks have devastated business in the city centre, where many shops and cafés have closed because customers are staying away. Yesterday's attack was the 20th on civilians in Jerusalem since the intifada started in September 2000.

Avraham Birnbaum, the chairman of the Israel Merchants Association, who heard the explosion from his office two blocks away, reported a 60 per cent drop in high street shopping in Jerusalem and other major cities.

Benzi Ofir was serving his first and only tourist of the day in his Jaffa Road jewellery shop opposite the site of yesterday's bombing when his window was blown in. "I heard an enormous blast and saw a cloud of black smoke," he said. "I saw the bomber lying on the ground, gushing blood." Asked whether he had considered closing down, he said: "No way. I still believe."

Although the Palestinian Authority was quick to condemn the bombing, Israel again blamed Yasser Arafat. Daniel Seaman, a government spokesman, said: "Not only is he not doing anything to prevent terrorism, all his actions are encouraging terrorism." Asked whether Israel would retaliate, he said: "We'll do everything necessary to prevent the attacks and protect Israeli lives."

Saeb Erakat, a senior Palestinian negotiator, accused Ariel Sharon, the Israeli Prime Minister, and the Bush administration of shackling Mr Arafat. "Sharon is doing everything possible to erode the Palestinian Authority's capacity to function," he said.

Mr Arafat is not easing the peace-makers' task. Addressing hundreds of supporters on Saturday, he ordered them to march as martyrs on Jerusalem and issued a ringing call for holy war.