Police have confirmed that an explosive device was detonated at the back of the bus.
21 people have been injured in an explosion on a bus in Jerusalem, according to an Israeli rescue service.
A spokeswoman for the mayor in Jerusalem, said the explosion in an area in the southwest of the city close to the boundary with the Israeli-occupied West Bank, was a bombing.
Speaking to Reuters news agency, she said 'it was small, but it was definitely a bomb.' In addition, the Jerusalem police commissioner said there was 'no doubt' it was a terror attack.
"We are investigating where the explosive device came from, who planted it, how it got on the bus. All this is in the initial stages of investigation."
There were initial fears that the explosion was caused by terrorist activity, which was later downgraded to suspicions of a technical malfunction in one bus which ignited a trigger in another bus carrying passengers. Police in Israel have since confirmed that an explosive device was detonated at the back of the bus.
The injuries caused by the incident are said to range from burn wounds to smoke inhalation.