Israel, meanwhile, weighed a military response to Tuesday's blast on a bus packed with ultra-Orthodox Jewish families returning from the Western Wall, Judaism's holiest shrine. The attack was one of the deadliest in three years of fighting and placed a U.S.-backed peace plan in serious jeopardy. About 40 of more than 100 wounded were children.
Among the dead was Goldie Taubenfeld, 43, of New Square, N.Y., said New York State Assemblyman Ryan Karben, who represents her district.
Karben, a family friend, told WCBS-AM Taubenfeld was "filled with joy, filled with life."
"It's just an unspeakable tragedy," he said.
Four other American citizens were among the 20 people killed, a U.S. Embassy official said Wednesday.
They were Taubenfeld's three month-old son Shmuel; Tehilla Nathanson, 3, from Monsey, N.Y.; and Mordechai Reinitz, 47, and his son, Yitzhak, 9, residents of the Israeli coastal town of Netanya who had dual Israeli-American citizenship, said the embassy spokesman, Paul Patin. Their hometown in the United States was not immediately known.
CBS News Chief European Correspondent Tom Fenton reports a reprisal is nearly certain.
"It was such a devastating attack, such an outrageous attack, that the government is almost forced to react," he said.
Israeli radio reports said security officials decided against a renewed siege of Palestinian leader Yasser Arafat's headquarters in the West Bank.
In the Gaza Strip, Hamas leaders insisted Wednesday they remain committed to a three-month truce they and other militants declared unilaterally on June 29, but said they reserve the right to take revenge for the killing of operatives by Israeli troops.
"It was a devastating blow for Palestinian prime minister Mahmoud Abbas who just happened to be meeting with representatives of Hamas and Islamic Jihad, trying to talk them out of further attacks against Israelis, when the suicide bomber struck," said Fenton.
Abbas is now under growing international pressure to take action against the militants. He convened an emergency Cabinet session for later Wednesday, but it remained unclear whether he would order arrests of militant leaders. Abbas could lose his job if the violence persists.
Abbas ordered Palestinian security forces on Wednesday to hunt down and arrest militants behind a suicide bombing that killed 20 people on a Jerusalem bus, reported Israel's Haaretz newspaper.
Earlier on Wednesday, Abbas cut off contact with Islamic militants and vowed to take action against them. "Instructions were given to Palestinian security services to pursue those who were behind the operation and to bring them to justice," Palestinian Information Minister Nabil Amr said.
There were some indications that the bomber, who had disguised himself as an ultra-Orthodox Jew, had also tried to settle a personal score with the attack. The assailant, 29-year-old mosque preacher Raed Mesk from the West Bank city of Hebron, was friends with an Islamic Jihad leader in Hebron, Mohammed Sidr, who was killed by troops last week.
Abbas condemned the attack as a "terrible crime" and announced he was cutting off contacts with the militant groups. Abbas also called off trips to Italy and Norway, initially planned for later this week.
Fenton says Abbas is trying to salvage the peace process.
"The whole thing is likely to run off the track, and that's exactly what this attack was intended to do," he said.
Abbas has been avoiding confrontation with the militants, instead of trying to bring them in line with persuasion, even though the "road map" peace plan demands that Palestinian security forces begin dismantling the militant groups.
Both sides have a continued interest in trying to keep the U.S.-backed peace plan alive, since the alternative would be much worse, commentators said.
Alex Fishman, a military correspondent for the Israeli newspaper Yediot Ahronot, said the United States would likely increase its pressure on the Palestinian Authority to round up militants.
"It is absolutely necessary to continue on the political track because the alternative is a return to the never-ending cycle of blood," Fishman wrote.
In a first response, Israel froze all contacts with the Palestinian Authority and canceled the planned handover of two West Bank towns to Palestinian control, a move that had been expected later this week. The Israeli army also closed border crossings to seal off the West Bank and Gaza Strip.
Palestinian legislator Saeb Erekat criticized Israel's decision, saying it was important to maintain contacts. "The main message I want to send to the Americans is that ... every possible effort should be exerted to keep the road map and the truce alive," he said.
But sources told Haaretz that any agreements previously reached about the transfer of security control for West Bank cities are now void.
The suicide bomber detonated the explosives in the center of a tandem bus, which has two passenger sections, on a main thoroughfare in central Jerusalem.
Many Jewish worshippers had stepped aboard at the Jewish holy site, the Western Wall. The bus was headed to an ultra-Orthodox Jewish neighborhood on the city's outskirts, and families with children were packed in the seats and aisles.
A rescue worker, Yehuda Meshi-Zahav, said he was one of the first people on the scene and while checking to see if there were survivors, he found a baby just a few months old, crying and alive. The baby is hospitalized, officials said.
"I had just come home from praying at the Western Wall and was heading home," said Zvi Weiss, an 18-year-old seminary student from New York City who sat in the front of the bus and escaped unharmed.
"The bomb went off at the back of the bus. Everything went black. I climbed out of the broken window and started running," Weiss said. "All around me there were people covered in blood, screaming, some with limbs missing."
The blast, just across from a synagogue, was so powerful it blew a hole in the bus roof and shattered the windows of a passing bus. Rescuers had to use blowtorches to get out some of the wounded. Police said the bomb had been packed with bits of metal for greater deadliness.
Several crying children with tattered clothes and blood-smeared faces were led away from the scene. One paramedic cradled a little girl in his arms, while television footage showed doctors leaning over a bloodied infant in an ambulance.
In an Israeli prison, Palestinian security prisoners applauded joyously and passed out candy when they learned of the bombing, the Israel Prisons Authority said.
The ambassadors of the European Union, Italy and Ireland laid a wreath Wednesday against a tree and lit 18 candles — matching early estimates of the number of dead — on a roundabout close to where the bomber struck.
"We totally condemn this act of brutal violence that pulls us back in efforts to reconcile," EU Amabassador Giancarlo Chevallard said, urging both sides to avoid a slide into more violence.
The bombing drew statements of condemnation from the United States, the European Union, Britain and the United Nations.
U.N. Secretary-General Kofi Annan urged Abbas "to take decisive action to arrest the instigators of this attack and prevent such attacks from happening again," U.N. spokesman Fred Eckhard said in New York. Annan also urged Israel to "act with restraint in the face of this provocation, and not contribute to a renewed cycle of violence and revenge."
Since the intefadeh began in September 2000, more than 2,400 people have been killed on the Palestinian side and more than 800 on the Israeli side.