Israel says Monday's bus bombing in Jerusalem, which wounded 20 people, was a suicide attack by a member of the Palestinian Islamist movement Hamas.
Police named the bomber as 19-year-old Abdul Hamid Abu Srour, from near Bethlehem, who died on Wednesday of the injuries he sustained in the attack.
Hamas has said Abu Srour was a member but has not claimed responsibility.
A number of suspects from the Bethlehem area have been arrested in connection with the bombing, Israel says.
Correspondents say it was reminiscent of the suicide attacks by Palestinian militants in Jerusalem during the second intifada, or uprising, over a decade ago.
Aida camp resident
An Israeli hospital that treated casualties from the bombing said one of the two people who were admitted in a serious condition had died on Wednesday night.
Shaare Zedek Medical Center spokeswoman Shoham Ruvio said the man lost both legs in the explosion, and underwent multiple operations.
Soon afterwards, the Palestinian health ministry and Hamas identified him as Abu Srour, a resident of the Aida refugee camp in the occupied West Bank.
Palestinians subsequently paid their condolences to members of his family in the camp, where posters put up by Hamas hailed him as a "martyr".
Hamas, which dominates the Gaza Strip and carried out a wave of deadly bus bombings in Jerusalem in the early 2000s, had earlier called Monday's blast "a natural reaction to Israeli crimes".
On Thursday, Israel's Shin Bet security agency said security forces had arrested several suspected accomplices of Abu Srour in the Bethlehem area and that they were being questioned.
Hours after the bombing, Israeli Prime Minister Benjamin Netanyahu linked it to the wave of stabbing, shooting and car-ramming attacks by Palestinians and Israeli Arabs over the past six months that have left 29 Israelis dead.
About 200 Palestinians - mostly attackers, Israel says - have also been killed in that period.
The assailants who have been killed have been shot dead either by their victims or by security forces as they carried out attacks. Some attackers have been arrested.
Other Palestinians have been killed in clashes with Israeli troops.