Palestinian refugees living in Lebanese camps celebrated Wednesday after a bomb ripped through a bus in Tel Aviv injuring 17 people, camp residents told AFP.

In Nahr al-Bared camp in north Lebanon muezzins sang out words of praise to God via their megaphones, while fireworks lit the sky and fighters handed out sweets, residents said.

In Ain al-Hilweh near the southern city of Sidon, fighters shot live rounds into the air, while Islamist militants chanted religious texts.

Medics said at least 17 people were injured in what Israel says was "a terrorist attack."

The blast took place as US Secretary of State Hillary Clinton was in Israel for talks with Prime Minister Benjamin Netanyahu on ways to end a deadly spike in bloodshed in and around Gaza over the past week.