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In an apparent terrorist attack, a powerful explosion ripped a 40-foot hole in the side of a U.S. Navy destroyer docked at Yemen on Thursday, killing 17 American soldiers and injuring more than 30 others.

The attack came shortly after noon in the port of Aden, just east of the southern end of the Red Sea. A small harbor boat that was helping the USS Cole to dock for refueling exploded alongside the ship.

Two men in the boat had just tied one of the destroyer’s lines to a mooring when they pulled their boat near the destroyer, according to the Pentagon. Crew members noticed the men standing at attention on the boat just seconds before it blew to pieces and tore into the ship. The explosion appeared to be a well-planned suicide attack, U.S. officials said.

“If, as it now appears, this was an act of terrorism, it was a despicable and cowardly act,” President Clinton said Thursday. “We will find out who was responsible and hold them accountable. If their intention was to deter us from our mission of promoting peace and security in the Middle East, they will fail utterly.”

No one took responsibility for the attack, but anti-American sentiment has been running high in the Arab world since tensions between Israelis and Palestinians have led to deadly clashes in Israel and Palestinian territories.

The crisis intensified Thursday with news that a Palestinian mob beat three Israeli soldiers to death in Ramallah in the West Bank. To retaliate, Israeli helicopters hit targets such as a Palestinian TV station and police headquarters with rocket fire.

Meanwhile, U.S. officials scrambled to salvage peace talks between Israel and the Palestinians. But after two weeks of violence that has claimed more than 90 lives, mostly Palestinians, the prospect for peace seemed to be fading.

“Now is the time to stop the bloodshed, to return to dialogue and, ultimately, to the negotiating table,” Clinton said. “The alternative to the peace process is … unfolding before our very eyes.”

The Cole has a crew of about 300 men and women. At its home port in Norfolk, Va., the Navy set up a center for family members to gather as news came in. On Friday, dead and injured soldiers were flown to a U.S. military base in Germany.