It was the first cabinet meeting called on the Jewish Sabbath in years and it was a heated one. The hawks in Prime Minister Ariel Sharon's cabinet wanted immediate round-the-clock air strikes on the West Bank and Gaza Strip to avenge the previous day's Palestinian suicide bombing at a Tel Aviv nightclub. The moderates, like Foreign Minister Shimon Peres, favored a diplomatic response to the attack, which killed 18 people. The dreadful pictures of teenage revelers stewing in their own blood offered a chance to corner Palestinian leader Yasser Arafat, to mobilize international pressure for a truce, Peres told fellow cabinet ministers. But that meant Israel would have to hold its fire. After five hours of arguing, Sharon spoke up. A source in the meeting says it was clear from his remarks that he was siding with the hardliners.

The worst Palestinian suicide attack on Israel in five years is threatening to push the region deeper into the hovel of violence and gloom. But in the vagaries of Israeli-Palestinian relations, it also pointed to a way out after eight months of fighting. Hours after the attack, under threat of an imminent Israeli reprisal, Palestinian leader Arafat took a few tenuous steps towards a truce. It wasn't much-a call for a cessation of violence and a condemnation of the bombing-but it was enough to fend off for at least for a day Israel's retaliation. For once, it looked as if Israelis and Palestinians had recoiled from the specter of escalation. But with Hamas and Islamic Jihad-the two militant Palestinian groups behind a series of bombings in Israel-threatening more attacks, the respite might be short.

Islamic Jihad was thought to be behind Friday's attack. A Palestinian clad in a bomb belt that included pouches of nails and screws for a deadlier effect jostled his way into a crowd of Friday night revelers at the entrance to the Pacha dance club. It was "girls night" at the club-women who arrived before midnight entered free. At 11:30 p.m., when the bomber struck, most of the partyers waiting to get in were women. "I just finished basic training and we were having a party here," said an 18-year-old woman soldier, speaking from her hospital bed. "I fell to the ground and fainted. I just remember someone dragging me to an ambulance." Her back was covered in shrapnel. Other survivors lost limbs or suffered severe burns. Yaniv Yosef, who was moderately wounded in the attack, said he had come to Pacha with friends to celebrate his 18th birthday. "I remember the explosion and then the scene-pieces of flesh all over the place, puddles of blood on the ground," he said at the hospital.

Palestinians braced for an immediate Israeli payback. The last time a suicide bomber killed Israelis two weeks ago in the coastal town of Netanya, Sharon waited only a few hours before sending warplanes to bomb targets in the West Bank and Gaza. Palestinian police in the West Bank and Gaza cleared out of their barracks and braced for the worst.

A statement issued by Israel's security cabinet midday Saturday said only that Israel "would do whatever is necessary to protect its citizens", and didn't terminate a limited ceasefire Israel imposed on itself two weeks ago. Behind the scenes, U.S. State Department officials gave Arafat a stern warning that "the time for procrastinating was over". The result: An unequivocal condemnation by Arafat and a pledge to halt the violence. "We exerted and we will now exert our utmost efforts to stop the bloodshed of our people and the Israeli people and to do all that is needed to achieve an immediate and unconditional, real and effective ceasefire," he told reporters in the West Bank.

For Israel, it was lip service. The test will be in the way Palestinian gunmen and militants respond. At least one leading member of Islamic Jihad already announced that he wouldn't comply. "We respect his point of view but his words won't stop us from continuing the attacks," Abdullah Shami said in Gaza. Nor, apparently, will they prevent Israeli reprisals.