CNN is reporting that "the shuttle was flying at about 200,000 feet above earth when it disappeared—well out of range of surface-to-air missiles." That doesn't entirely quell fears that terrorists were responsible for the deaths, especially since the crew included one Israeli. But it makes it more likely that the explanation for the explosion was more mundane, though no less sad.
A slightly less reassuring reassurance from Ha'aretz: "A senior law enforcement official, speaking on condition of anonymity, said there had been some intelligence that raised concerns about a previously scheduled flight of Columbia, which was to have carried the same crew.
"The intelligence, related to Ramon, was termed not credible, but the flight was postponed for other reasons. There had been no troubling intelligence regarding this flight, officials said, and they do not believe terrorism was involved."
Update: Glenn Reynolds has posted some more good reasons to suspect that this wasn't terrorism, including this one: "if you planted a bomb, you'd want it to go off on takeoff—that's when everyone is watching, and there's less time for stuff to go wrong."