Red flares lit up the night sky over Ramallah in the West Bank during the assault, and flames leaped from burning buildings and cars as firemen attempted to extinguish multiple blazes.
In the air strikes, two Palestinians were killed in Ramallah, one a member of Force 17, the other a woman civilian, hospital doctors said. Overall, more than two dozen Palestinians were injured in Ramallah and Gaza, several critically, the doctors said.
All the targets in Ramallah and Gaza - including a headquarters building, a training camp and an arms depot - belonged to Force 17, which protects Arafat, the Palestinian leader. Israeli Prime Minister Ariel Sharon has repeatedly accused Force 17 of involvement in attacks against Israeli civilians.
``We had ample evidence that forces of the Palestinian Authority, namely Force 17, were involved in terrorist activity in Israel,'' said Raanan Gissin, a spokesman for Sharon.
In Gaza City, the low-flying Israeli gunships blasted a Force 17 building that had been used as a weapons arsenal, and is only 100 meters (yards) from Arafat's house and 500 meters (yards) from Arafat's headquarters on Gaza's Mediterranean coast.
The Palestinians said the building had been empty for some time, but women and children screamed as they fled nearby buildings. The smell of gunpowder hung in the salty sea air after the assault.
Arafat was in Amman, Jordan, where Arab leaders wrapped up a two-day summit earlier Wednesday with pledges of financial aid to the cash-strapped Palestinian Authority.
In the southern Gaza Strip, Israeli helicopter gunships hovered over the Force 17 building in Dir Al-Balach, unleashing six rockets. In Gaza City, four explosions were heard just north of the city. Palestinian police said the Israelis bombarded a police building in the area.
Saeb Erekat, a senior Palestinian negotiator speaking in Amman, Jordan, called the attacks ``premeditated Israeli aggression which will escalate drastically.''
Sharon had been under growing pressure to respond to the spate of Palestinian attacks, which included three bombings and the shooting death of a 10-year-old girl in a span of less than 48 hours.
``We are witnessing grave terrorist activities - terrorist activities that the chairman of the Palestinian Authority (Arafat) has not been willing until now to control,'' Sharon said before the nighttime raids. Israel carried out several helicopter attacks last October and November in the early weeks of the Palestinian uprising. But Wednesday's raid was the first in months.
In the Wednesday morning bomb attack, a Palestinian with explosives tucked inside his black leather jacket blew himself up and killed two Jewish teen-age seminary students waiting for a school bus.
The bomb went off during the morning rush hour in the parking lot of a gas station near the agricultural village of Sdeh Hemed, 15 miles (25 kilometers) northeast of Tel Aviv.
Shortly before the explosion, Israeli teen-agers were dropped off at the gas station to catch their regular ride in an armored bus to their seminary in Kedumim, a Jewish settlement in the nearby West Bank.
The assailant, described as a man in his late 20s with black hair and a mustache, had a nail-studded bomb under his black leather jacket, which was zipped to the neck despite the sweltering weather, witnesses said.
Two boys, ages 14 and 16, were killed, and four people were hurt, one critically. The radical Islamic group Hamas claimed responsibility and said seven more suicide bombers were ready to strike.
Two more bombs were discovered Wednesday morning and safely exploded in the open-air markets of the towns of Netanya, on the coast north of Tel Aviv, and Petah Tikvah, just to the east of Tel Aviv.
Also Wednesday, a 9-year-old Palestinian boy was killed and three other children were critically wounded when an Israeli shell exploded as they were playing with it in the Gaza Strip, doctors said.
A day earlier, two bomb blasts in Jerusalem injured more than 30 Israelis and killed the Palestinian bomber in one of the attacks. The 10-month-old Israeli girl was shot in the head Monday evening while in a stroller in West Bank town of Hebron.
Hamas released a video of a young man it said was the suicide bomber in Tuesday's attack. He identified himself as Dia Hussein Mohammed Tawil. Sitting with automatic rifles at his side, he said he was one of the Hamas ``martyrs prepared to turn their bodies and their bones into shrapnel that will kill the Zionist occupiers.''
Since the fighting began last September, 441 people have been killed, including 360 Palestinians, 62 Israeli Jews and 19 others.
Sharon and his aides have consistently blamed Arafat for attacks against Israelis, saying his security forces take part in violence, and have failed to rein in militants in groups such as Hamas.
Palestinian Cabinet Minister Nabil Amr said the Palestinian Authority had no ties to the bombings, and he called on Israel to resume peace talks and lift its travel restrictions on Palestinians.