Mr Hamdallah, the prime minister, was unharmed by the blast, but there are reports of some injuries.
President Mahmoud Abbas condemned the "cowardly targeting" of the convoy. He said he held the militant group Hamas, which dominates Gaza, responsible.
Hamas, on the other hand, said the attack was an attempt to damage Gaza's security and "deal a blow to efforts to finalise reconciliation" between the main Palestinian factions.
According to witnesses, a passenger on a motorbike threw an explosive device at the last car in the prime minister's convoy shortly after it entered Gaza through the Erez Crossing with Israel on Monday morning.
The UN Special Co-ordinator for the Middle East Peace Process, Nickolay Mladenov, also condemned the attack. He said it had to be promptly investigated and the perpetrators brought to justice.
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