Three people were killed and dozens wounded this morning, the Palestinian health ministry said, as Israeli forces raided the occupied West Bank city of Nablus.
The Israeli military said a senior militant commander was among the dead.
The latest violence comes two days after deadly fighting between Israel and Islamic Jihad militants in the coastal enclave of Gaza was halted by a truce.
In the old city of Nablus, an AFP correspondent reported Palestinians trading gunfire with Israeli security forces.
The Palestinian Red Crescent Society said its medics treated 69 people for gunshot wounds across the Nablus area, at least four of them in critical condition.
"The terrorist Ibrahim al-Nabulsi was killed in the city of Nablus," the Israeli army said in a statement, adding that "another terrorist who was staying in the house" also died.
Israeli forces said they launched a shoulder-fired missile at the house and detained four suspects in the raid.
Nabulsi was a commander of the Al-Aqsa Martyrs' Brigade, one of the main militant groups present in the West Bank operating under the ruling Fatah party.
Following the deadly raid, the militant group said "the response will fit the crime".
Hundreds of people gathered outside the Nablus hospital where Nabulsi was brought by a dozen gunmen, an AFP correspondent reported.
Teen killed 'on way to market'
The Palestinian health ministry named those killed as Nabulsi, Islam Sabbouh and Hussein Taha.
Jamal Taha said his 16-year-old son was killed while they were walking to work.
"The army was in the old city. My son went ahead of me to the market, he was carrying his food. There was shooting and four of us were injured," he said.
Heavy gunfire was heard as dozens of Israeli military vehicles brought traffic in one of the West Bank's largest cities to a standstill.
Clashes with the Israeli army also broke out in other parts of the city, as Palestinians hurled stones at the troops.
"A violent clash developed with dozens of rioters who threw stones and threw explosives at the forces, who responded by means of crowd dispersal and shooting. Several injuries were confirmed," the army said.
"All the forces have left the city, there are no casualties to our forces," it added.
Israeli security forces have conducted near-daily and often deadly operations in the West Bank in recent months, focusing on militants from the Islamic Jihad group.
Deadly Gaza fighting
On Friday, Israel launched what it called a "pre-emptive" aerial and artillery bombardment of Islamic Jihad positions in the Gaza Strip, leading militants in the coastal enclave to fire more than a thousand rockets in retaliation, according to the army.
An Egypt-brokered ceasefire reached on Sunday ended three days of intense fighting that killed 46 Palestinians, 16 of them children, and wounded 360, according to Gaza's health ministry.
Israeli Prime Minister Yair Lapid spoke by telephone with Egyptian President Abdel Fattah al-Sisi yesterday, with the premier praising Cairo for its role in "preserving regional stability and security".
But following the Nablus raid, a spokesman for Palestinian president Mahmoud Abbas said Israel is "not interested in calm and stability".
"It's exploiting and killing Palestinians for gains in internal Israeli politics," Nabil Abu Rudeineh said, alluding to a snap Israeli general election called for 1 November.
The Israeli prime minister said yesterday the strikes on Gaza had hit the "entire senior military command of Islamic Jihad" in the Palestinian enclave.
Islamic Jihad said 12 of its members had been killed, including commanders Taysir al-Jabari and Khaled Mansour.
Israel insists that some civilians counted in the Palestinian toll were killed by Islamic Jihad rockets that fell short or misfired.