Israeli police said they were treating the incident as a criminal incident, noting they did not suspect a terrorist motive.
She added that she ruled out the possibility that the explosion was the result of a bomb, noting that the fire spread to two nearby stores.
Israeli media reported that bomb squads called to the scene found no indication that the explosion was caused by a bomb planted in the car.
Police are now investigating other options, including the possibility that a hand grenade or Molotov cocktail was thrown at the car, causing it to catch fire and explode.
Police forces worked to evacuate people trapped in two shops that caught fire as a result of the explosion.
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