Three Israelis were killed when a Palestinian blew himself up in a baker's shop in the first suicide bombing in the Red Sea resort of Eilat ­ and the first anywhere in Israel for nine months.

Police said last night that the 20-year-old bomber from Gaza, who came into Eilat, the southernmost city in Israel, from Egypt, had been recruited and directed by Islamic Jihad, responsible for sporadic suicide attacks since February 2005.

Hamas, which controls the Palestinian Authority, notably refrained from condemning the bombing, with one of its Gaza spokesmen, Fawzi Barhoum, calling it a "natural response" to Israeli military policies in the West Bank and Gaza Strip, as well as its boycott of the authority. " So long as there is occupation, resistance is legitimate," he said.

The bombing, which puts fresh strain on the fragile Gaza ceasefire declared in November, came in the week of a meeting of the international "quartet " scheduled for Friday, designed to inject new momentum into peace efforts between the Israelis and the Palestinian President Mahmoud Abbas. Amir Peretz, Israel's Defence Minister, reportedly ordered the military to step up operations against militants after the "escalation" while doing their best to maintain the ceasefire.

In Eilat a witness, Benny Mazgini, who had been in an apartment opposite the bakery, said the bomber had stood out because he was wearing a long winter coat on a sunny day with temperatures of about 20C. He told Israel Radio: " It didn't look right to me. I thought to myself: 'What's that idiot dressed like that for?' A couple of seconds later I heard a massive explosion." Mr Mazgini, 45, said he ran outside and saw body parts scattered on the pavement. "It was awful ­ there was smoke, pieces of flesh all over the place," he said.

The bakery is in a residential area in northern Eilat, away from the main beaches and tourist hotels. Police said the man, named by militants as Mohammed Saksak, 20, of Gaza City, had hitched a lift into the area with a resident after crossing the border to the north of the city. A police spokesman, Mickey Rosenfeld, said that the motorist had alerted police, who searched the area where he had been dropped but were unable to locate him before the bomb went off.

Like the Hamas spokesman, Islamic Jihad sought to present the bombing as a preferable alternative to the factional violence in Gaza which has cost 29 Palestinian lives since last Thursday. "It is necessary to end the infighting and point the guns toward the occupation," a posting on the Islamic Jihad website said.

Last night the Hamas Foreign Minister Mahmoud Zahar said that a ceasefire, due to be implemented at 1am GMT last night, had been agreed between Hamas and Fatah factions in Gaza.

Lorna Fitzsimons, the former Labour MP who heads the Britain Israel Communications and Research Centre (Bicom) and is on holiday in Eilat, strongly condemned the bombing at a time when Israel had been "moving in the right direction" by transferring tax revenues to Mr Abbas. She added: "The Palestinians need to cease terror and agree to recognise Israel's right to exist. This is a real setback for those of us who believe in Israel's right to live in peace and security next to a Palestinian state." She said that security in Eilat had been tangibly tightened since the blast.

The Palestinian news agency Ramattan quoted the bomber's brother Naeem as saying his family had expected him to carry out a "martyrdom operation" and that his parents had "prayed for him to succeed". Associated Press quoted relatives as saying that he had been despondent at his daughter's death from illness and because he was unemployed, adding that he had a brother who was an Islamic Jihad militant.