At least five Palestinians, including a 15-year-old boy, were killed in heavy exchanges of fire during an Israeli military incursion into the Jenin refugee camp in the northern West Bank.
More than 90 Palestinians were also injured, according to Palestinian sources.
Eight Israeli soldiers were injured when a powerful bomb exploded close to a military vehicle as the troops were leaving the area after arresting four wanted gunmen.
Following the explosion, dozens of Palestinian gunmen pinned down the Israeli troops with heavy gunfire, prompting the Israeli military to use a helicopter gunship to fire at the militants in order to allow the soldiers to escape. This marked the first use of helicopter gunship fire in the West Bank in more than two decades.
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The last of the Israeli troops left the densely populated refugee camp after nine hours of intense fighting.
Jenin and its adjacent refugee camp is a stronghold of the Islamic Jihad and other militant groups and in recent years has become a virtual no-go zone for the Palestinian president Mahmoud Abbas’s security forces.
An Islamic Jihad source in the West Bank warned Israel that air strikes would prompt its fighters to use means that would “surprise the enemy.” The source warned that Islamic Jihad fighters were on a state of high alert, ready to engage and to escalate if necessary.
Nabil Abu Rudeineh, a spokesman for Mr Abbas, called the military raid a “massacre” whose purpose was to blow up the area.
“The current situation cannot continue, and the international community and the American administration must intervene immediately to stop this Israeli madness. The international silence and contentment with statements of condemnation encourage the occupation government to continue its crimes,” he said.
Visiting the wounded soldiers in hospital, Israeli prime minister Binyamin Netanyahu said his government’s forces “are hitting out at terrorism with strength and determination.”
Bezalel Smotrich, Israel’s finance minister and head of the far-right Religious Zionist party, called for ending surgical strikes and instead launching a sweeping military campaign in the West Bank.
Meanwhile, the US said it was deeply troubled by Israel’s decision to move ahead with the construction of 4,500 new homes for Jewish settlers in the West Bank.
State department spokesman Matthew Miller said that the administration was also troubled by Sunday’s decision by the Israeli cabinet to expedite the construction approval process.
He said that the US was opposed to unilateral steps that made it more difficult to achieve the two-state solution and posed an obstacle to peace. He called on Israel to fulfill previous commitments it made to return to dialogue aimed at de-escalation.
The Israeli cabinet decided to move ahead with settlement construction with almost no need for approval from the political leadership. Instead of the defence minister having to approve each of four stages individually, a one-time green light will now be required at the beginning of the process from Mr Smotrich, himself a settler whose party champions West Bank settlement as a top priority
