Israeli forces have shot dead two Hamas militants during a raid in the West Bank city of Hebron, Israeli and Palestinian officials say.
Israeli Defence Minister Ehud Barak said the men were involved in an attack that killed four settlers on the eve of the relaunch of peace talks last month.
Six other Palestinians were arrested in the overnight raid, the army said.
The military wing of the Islamist Hamas movement has issued a statement vowing to avenge the deaths.
Hamas controls the Gaza Strip, while its secular rival Fatah is in power in the West Bank.
In recent weeks, Israeli and Palestinian security forces have stepped up operations against Hamas figures living in the West Bank, says the BBC's Jon Donnison from Ramallah.
A Hamas spokesman has accused Fatah forces of collaborating with Israel to carry out last night's raid, a sign of the ongoing acrimony between the two groups, our correspondent says.
Palestinian witnesses said Israeli troops surrounded a house before dawn on Friday and, following gunfire, used bulldozers to raze the three-storey building.
Residents said the dead men - 33-year-old Nashat Karmi and 24-year-old Mammon Natsha - were local leaders of the Izz al-Din Qassam Brigades, Hamas's military wing.
A statement issued by Israeli Defence Minister Ehud Barak said Friday's operation was a "swift reply" to the killing of the four settlers on 31 August.
The four victims - including a pregnant woman - were killed when Palestinian gunmen opened fire on their car near Hebron, where Hamas has strong support.
The Qassam Brigades later said it had carried out the "heroic operation".
Hebron, in which some 500 Jewish settlers live in fortified enclaves amid about 100,000 Palestinians, has been the scene of frequent violence.
Hundreds of Palestinians attended the men's funeral in the city on Friday, while thousands more rallied in Gaza to mourn the slain militants.
Clashes erupted in Silwan, an East Jerusalem neighbourhood that is a frequent flashpoint because of the number of Jewish settlers who have moved into the predominantly Arab neighbourhood.
Israel has occupied the West Bank, including East Jerusalem, since 1967, housing nearly 500,000 Jews in more than 100 settlements. Some 2.5 million Palestinians live in the West Bank.
Jewish settlements are illegal under international law, though Israel disputes this.