Israel's domestic intelligence service Shin Bet says it has foiled a bomb attack in Israel.
A resident of the Gaza Strip had intended to use an explosive device on a bus in the south of the country after charges were brought against him four weeks ago, the domestic intelligence service said.
The man had a work permit in Israel.
The intelligence service said the militant Palestinian organisation Islamic Jihad had recruited and trained the 31-year-old in the Gaza Strip.
However, the suspect had obtained the components to build the bomb in Israel.
The foiled attack prompted Israel to revoke the work permits of approximately 200 Gaza Strip residents with familial ties to what authorities call terrorists.
Israel's Defence Minister Benny Gantz said that the attempt by terror groups in Gaza to exploit the work permit was endangering the livelihoods of hundreds of thousands of Gaza residents.
If it turns out that there is a trend to recruit workers, Israel will review its steps in the context as well as other civilian measures, he said.
About 17,000 Gazan workers are currently authorised to enter Israel.
The number of work permits was increased significantly last year.
Israel uses economic incentives in an attempt to create more security in the region.
About half of the 2.2 million people in the Gaza Strip are unemployed.