OCCUPIED JERUSALEM, 20 September — Israeli tanks besieged Palestinian leader Yasser Arafat’s battered Muqataa compound in Ramallah yesterday hours after a Palestinian blew himself up on a Tel Aviv bus killing five and wounding 50 people. Israeli officials said the nighttime assault was intended to "isolate" Arafat and force the surrender of 20 wanted men who they said were holed up inside.

Arafat aides said tanks entered his compound and opened fire with heavy machine guns. Arafat was unhurt, but two of his bodyguards were wounded in an exchange of fire with the Israeli troops.

"Tanks and jeeps are inside the compound and surrounding our office from all sides. There is fierce shooting. Two of our men have been injured but the president is fine," one of Arafat’s bodyguards said by telephone from inside the building.

As the standoff continued into the night, eight Palestinians surrendered to Israeli troops at the presidential compound. It was not clear whether any of the men taken into Israeli custody were among the 20 wanted by Israel. Israeli soldiers who had taken up position at the compound ordered the Palestinian prisoners, all dressed in civilian clothes, to put their hands on their heads as they approached, witnesses said. Troops blindfolded the men and tied their hands behind their backs.

"What we are doing right now is using loudspeakers to ask them to come out and surrender," said Gideon Meir, a senior Foreign Ministry official. Israeli security sources said the compound would remain under siege until the men surrendered, raising the possibility of a long encirclement.

Aides said they feared the troops would enter Arafat’s office. The Palestinian Authority called on the international community to "immediately stop this aggression" and urged the UN Security Council to dispatch monitors to the area.

Israeli Prime Minister Ariel Sharon has said in the past that he wants Arafat exiled.

The siege coincided with two incursions by Israeli tanks into the northern Gaza Strip. The army moved into Al-Shujayiah district on the eastern edge of Gaza City, while to the north, forces later moved around two kilometers into Palestinian territory toward the towns of Beit Lahiya and Beit Hanun, witnesses said. On the edge of Beit Lahiya, a car was shot at by the incoming tanks, although there were no immediate reports of casualties.

In Tel Aviv, ambulances raced to tree-lined Allenby Street where the bus exploded near cafes and restaurants and the main synagogue in the city. "I heard a massive blast. I ran outside where customers were eating lunch. I saw people escaping from the bus, jumping out of the windows covered in blood," said cafe owner Ofer Menachem.

The Palestinian Authority condemned the bombing, saying it gives the Israeli government a "pretext to kill and suppress". The blast, the second in 24 hours to shatter a six-week lull in attacks inside Israel, was claimed by Hamas. Even so, Sharon’s government followed a now well-established pattern, blaming Arafat.

US President George W. Bush "strongly" condemned the bombings in Israel and offered his condolences to the victims. "And we continue to send our message to the good people of that region that if you’re interested in peace, that if you want people to be able to grow up in a peaceful world, all parties must do everything they can to reject and stop violence," he added.