Hamas have claimed responsibility for a failed terror attack in south Tel Aviv last night, after police determined it was intended as an attack of terror.

The bomber, who was killed when his backpack exploded, was a Palestinian from the area of Nablus in the West Bank, and an accomplice is believed to have transported him to Tel Aviv, according to Hebrew media reports.

In a statement, Hamas said that it was a joint attack with Palestinian Islamic Jihad, and threatened further attacks on Israeli soil

Authorities are now investigating whether the detonation was deliberate or accidental.

“It can be said that this was a terror attack, with the detonation of a powerful explosive device," the police and ISA said in a joint statement following a situation assessment led by the commander of the Tel Aviv District, who ordered increased alertness in the Gush Dan region.

Kan News reported that according to estimates the bomb weighed less than 10 kilograms, and that the security establishment is very concerned about copycat attacks.

Extensive searches by security forces were underway across the Tel Aviv metropolitan area.

"Citizens are urged to be vigilant and notify the police at the 100 hotline," the statement said.

A local police commander said earlier Monday that it is "99%" certain that the explosion was a failed terrorist attack, calling it a "miracle" that it had not resulted in mass casualties.

Ayalon District Police Commander Haim Bublil told Kan News Radio that "it is possible that the assailant planned to reach the nearby synagogue or perhaps the shopping centre. We have no ability to understand why [the bomb] exploded at this point in time."

According to reports, the blast occurred on Lehi Road around 8 p.m. A 33-year-old passerby by on an electric scooter was moderately wounded.

Paramedics declared the bomber dead at the scene, and the wounded man was taken to a local hospital.

"The scene here speaks for itself, it is a powerful charge that could have caused significant damage. We are in a kind of miracle that the incident did not end in dozens of deaths," said Bublil.

Police spokesman Eli Levy also confirmed to Kan News that there is a high probably the incident was an attempted terrorist attack.

"A great miracle happened here. It's a very serious incident that was investigated by the police and the ISA," he said.