Since some of my readers are compulsive worriers and had asked, let me reassure everyone that I was not in Tel Aviv at the time of last Friday's bombing. Although I did spend a lovely afternoon playing with the Tel Aviv Go club, I was back in Rehovot by the evening.
Overall, I would not expect this to become a routine event again, like it was in the early days of the present Intifada.
Although it remains unclear just who was behind the attack, current indications are that the attack was intended primarily as an act of sabotage against the new leadership and policies of the Palestinian Authority, to try and break down the present period of calm. (Note that what we have just now, according to parties on both sides, explicitly does not rise to the level of a ceasefire/hudna/truce.) The expectation -- probably correct -- is that if the IDF can be provoked into striking against the militant groups, they will resume attacks. Since Sharon will supposedly grant no concessions without calm, Abbas would then have nothing to show for his overtures, and the status quo would be restored. Hamas will continue to be an up and coming political force with aspirations to replace Abbas' Fatah as the dominant Palestinian political force.
However, I tentatively have more faith than that in Abbas' survival instincts. The Palestinian people are mostly tired of conflict, and want some tangible improvement in their quality of life. If Abbas can't keep the militants under control, Sharon will have no reason to give him anything. Worse, failure here would allow the Israeli right to paint him as in league with the militants, giving Sharon the cover he'd need to marginalize the PA again as he did with Arafat, and thus a crucial few more years to finish his wall and further entrench the West Bank settlements. Abbas has ample motivation to maintain quiet for the time being.
Given that Abbas will proceed in a more-or-less sensible fashion, he's still threading a somewhat narrow path. The worry everyone's been obsessing over since the beginning of time (a couple of years, anyway) is that pushing too hard on the militants would lead to an intra-Palestine civil war. This strikes me as unlikely. The more serious possibility is that applying too little pressure would leave the militant groups free to attack at will and thus to effectively exercise a veto on the negotiations. The fact that last weekend's bombing was practically a freelance operation (at least, nobody's owning up to it) suggests that we actually are in the happy medium condition.