Twenty-one people were wounded, including two seriously, when an explosive device blew up aboard a bus in Jerusalem on Monday afternoon, causing it to catch on fire while it was driving, in what the defense establishment suspects to be a terror bombing.

The bus was travelling from the East Talpiot neighborhood towards Mount Herzl when an explosion went off on it and it caught fire. As a result of the explosion, a nearby bus and a private vehicle also caught on fire.

Police confirmed the explosion was caused by an explosive device placed in the rear part of the bus.

After initial confusion over the cause of the fire, Police spokesman Micky Rosenfeld said a forensics team, aided by bomb disposal experts at the site, confirmed the fires were ignited by an explosive device.

“What we confirmed is that the remains of an explosive device were found on one of the buses,” said Police spokesman Micky Rosenfeld.

“But we are still questioning people who are in the hospital to determine what happened moments before the explosion, and despite strong evidence, we’re working carefully and cautiously to confirm whether it was a terrorist attack.”

Hadassah's Ein Karem hospital received eight of the wounded, including a 28-year-old woman in serious condition.

Prof. Avraham Rivkind, the head of the Shock Unit at the Hadassah Ein Karem hospital, said some of the injuries were in line with injuries from past terror bombings in Jerusalem. "There are penetration wounds. We saw in imaging and we pulled out a nail and nuts," he said.

The terror attack breaks weeks of calm in Jerusalem after a six-month wave of violence seemed to be subsiding, and marked a return to a type of violence not seen in Jerusalem for years.

It was a stark reminder of an attack method commonly used during last decade’s Second Intifada, but which has since become rare as so-called lone-wolf attackers have assaulted Israelis using simpler weapons, such as knives, guns and cars.

In a first reaction to the bombing, Israeli Prime Minister Benjamin Netanyahu said Israel will find and punish the people responsible.

“We will find out who placed the bomb, we will reach those who dispatched them and we will also get to those who stand behind them, and settle the account with these terrorists,” he said.

The Gaza Strip-based Palestinian terror group Hamas praised the attack in a statement.

“Hamas welcomes the Jerusalem operation, and considers it a natural reaction to Israeli crimes, especially field executions and the desecration of the Al-Aqsa Mosque.”

Other Palestinian groups similarly applauded the bomb attack. The Palestinian Islamic Jihad “welcomed” the bombing as did the Popular Resistance Committees, which also called for more attacks.