2:10 PM ISRAEL TIME -- At least 10 people are reported hurt after an explosion occurred at a central Tel Aviv restaurant about 25 minutes ago. A bomb planted on the restaurant balcony appears to be the likeliest cause.

Meanwhile, Israeli soldiers are battling growing unrest in PLO-controlled Hebron, facing the combined onslaught of stones and petrol-bombs from protesters, and teargas and rubber bullets being fired towards them by Palestinian security force members..

Latest reports are that live ammunition gunfire has been exchanged between the Israelis and their Palestinian counterparts. The situation appears to be deteriorating.

Jewish residents in the town have been placed under curfew, and Israeli troops are trying to prevent more Arabs from entering the area.

An unspecified number of IDF soldiers have been injured by stones. Many have also been affected by teargas fired by PLO forces. Ambulances have been summoned.

Meanwhile in Jerusalem, at the site of a planned Jewish neighbourhood at Har Homa, Arab protesters are holding a demonstration, carrying black flags and setting fires in the area.

Police heads are bracing for trouble in the capital as thousands of Muslim worshippers leave the mosques after Friday prayers at about this time (2:00 PM local time).

American missions in Israel have issued a statement warning US citizens that the potential for violence is high due to "heightened tension at the present".

"Although they have not been specifically targeted for attack, US citizens have been killed in past terrorist actions in Israel, the West Bank and Gaza", the statement said, advising Americans in Israel to avoid large crowds and political demonstrations.

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