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The Palestinian Authority described the blast, which did not harm Prime Minister Rami Hamdallah but caused minor injuries to at least six bodyguards, as an assassination attempt. It held Hamas, the Islamist party in control of the Gaza Strip, responsible for what it described as a "treacherous act."
For its part, Hamas condemned the incident and said it has opened an investigation, quickly arresting several suspects. It accused "Israel and its agents" of being behind the attack in an effort to undermine Palestinian unity efforts.
Hamdallah was in Gaza to meet with Hamas officials in an attempt to restart talks between the Palestinian Authority, controlled by his party, Fatah, and its rival, Hamas. His convoy was just a few hundred yards from the Erez Crossing, which separates Gaza from Israel, when it was struck.
Three cars in the convoy were damaged in the explosion, their windows blown out.
The reconciliation talks were canceled after the blast, but the prime minister did go on to attend the scheduled opening of a wastewater-treatment plant in the northern Gaza Strip before leaving.
Security services personnel inspect the site of the explosion that occurred as the convoy of Palestinian Prime Minister Rami Hamdallah entered Gaza.
At the ceremony, Hamdallah described the incident as a "disgraceful act."
"What happened today will only increase our resolve to continue our work in the service of the Gaza Strip and end the division," he said.
The two factions have been in conflict for more than a decade, fighting bloody street battles in Gaza in 2007 after Fatah refused to cede control when Hamas won elections. Hamas took control of the Gaza Strip, while the Palestinian Authority continued to govern in the Israeli-occupied West Bank.
Hopes of a detente were raised last year when Hamas said it was ready to dissolve its shadow government in Gaza and hand over power to the Palestinian Authority, which had ramped up pressure on Hamas by cutting salaries and electricity supplies to the area.
The Gaza Strip has been blockaded by Israel since Hamas took control in 2007, with trade and the exit and entry of civilians strictly controlled. The border with Egypt also has remained largely closed.
After Egypt-brokered talks, Fatah and Hamas signed a reconciliation deal in October.
As part of the deal, Hamas handed over control of border crossings with Israel, including Erez, to the Palestinian Authority late last year. However, progress has stalled over thornier issues, such as whether Hamas will give up arms.
The Trump administration held a conference at the White House later Tuesday aimed at solving a growing humanitarian crisis in Gaza, as United Nations, Palestinian and Israeli officials warn that it may be on the brink of economic collapse.
After returning to the West Bank city of Ramallah, Hamdallah said he would be back in Gaza, with all of the Palestinian Authority's ministers and security forces, "soon."
He called on Hamas to allow the government to take control, saying there will be no security in Gaza until then.
Hamdallah also said he has been informed that the attack was planned in detail, with the explosives planted at a depth of 6 1/2 feet. The Palestinian Authority said intelligence chief Majid Faraj was also in the convoy but was not hurt.
Describing the convoy attack as a "grave incident," the U.N. special coordinator for the Middle East peace process, Nickolay Mladenov, called for a prompt investigation.
"Until the legitimate Palestinian Authority is fully empowered in Gaza, Hamas has a responsibility to ensure that the government is able to carry out its work in the Strip without fear of intimidation, harassment and violence," he said in a statement.