In today's public transport and especially bus traffic, punctuality is one of the main problems to deal with for traffic planners and operators, especially in large cities such as Stockholm. The current static models do not handle congestion delays and the interaction between bus and car traffic, leading to overly optimistic timetables and hard to manage delays. In the DYMOBUS project (Funded by VINNOVA and City of Stockholm) a dynamic modeling tool was developed in order to study these interactions. This paper discusses a mesoscopic, mixed-traffic, a transit simulation model designed to support evaluation of operations planning and control, especially in the context of Advanced Public Transportation Systems (APTS). Examples of applications include frequency determination, evaluation of real time control strategies for schedule maintenance and restoration from major disruptions. The transit simulation component is designed to represent realistically the uncertainty in operations, in order to assess service reliability. The simulation models all sources of uncertainty: chaining of trips, travel time variability, behavior at stops and a detailed representation of passenger demand at the various stops. Unlike most previous efforts in this area, the simulation model is built on the platform of a mesoscopic traffic simulation model, which allows modeling of the operations of large-scale transit systems. A Tel-Aviv case study demonstrates the transit simulation capabilities of the model and shows that important phenomena such as bus bunching are reproduced realistically.