Worshippers have returned to the synagogue in Jerusalem that on Tuesday was the scene of a deadly attack.
Security was stepped up by the Israeli authorities at the Kehilat Bnai Torah synagogue ahead of morning prayers.
In the attack, two Palestinian men armed with a gun, knives and meat cleavers killed four rabbis and a police officer before being shot dead.
Israel's Prime Minister Benjamin Netanyahu responded by promising to win the "battle for Jerusalem".
Before dawn on Wednesday, Israeli troops demolished the home of a Palestinian who killed a baby and a woman last month by ramming a car into a Jerusalem tram stop. The man, Abdel-Rahman Shaloudi, was from Silwan, an area of occupied Arab East Jerusalem.
Israel had stopped its policy of demolishing the homes of militants in 2005, after a review committee found they did not deter attacks. However, the practice resumed this year.
Mr Netanyahu told reporters on Wednesday: "There will be more house demolitions, and many other steps."
"We have nothing against the residents of East Jerusalem. But we will not tolerate attacks against our citizens, and we will act against those carrying out these acts and against inciters. With a determined and heavy hand we will restore security to Jerusalem," he added.
A total of 11 people have been killed by Palestinians in recent weeks, most of them in the city but also in Tel Aviv and the West Bank.
'Push towards escalation'
On Wednesday, thousands of people attended the funeral in the Galilee region of the Druze policeman who was shot by the assailants during the attack on the Kehilat Bnai Torah synagogue.
Public Security Minister Yitzhak Aharonovitch said Zidan Saif was a "hero of the Israel police, who laid down his own life to protect the worshippers".
At the same time, the Israeli authorities approved the construction of 78 homes in two settlements in occupied East Jerusalem.
Jerusalem's municipal planning committee said 50 housing units would be built in Har Homa and 28 in Ramot, which it considers city neighbourhoods.
A spokesman for Palestinian Authority President Mahmoud Abbas condemned the announcement.
"These decisions are a continuation of the Israeli government's policy to cause more tension, push towards further escalation and waste any chance to create an atmosphere for calm," Nabil Abu Rudeina told the Reuters news agency.
About 500,000 Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem. The settlements are considered illegal under international law, though Israel disputes this.
The advancement of plans in recent months for new settlement homes on land annexed to the city has angered Palestinians, who want East Jerusalem to be the capital of their future state.
Jerusalem has experienced months of violence since a Palestinian teenager was abducted and burned to death in July in a suspected reprisal attack by Jewish extremists for the abduction and killing of three Israeli teenagers in the occupied West Bank in June.
The killings set off an escalating cycle of violence, leading to a 50-day conflict between Israel and Palestinian militants in the Gaza Strip that claimed more than 2,000 lives.
Tensions in Jerusalem have recently been heightened by a dispute over a compound known to Jews as the Temple Mount - the holiest site in Judaism. The compound is known to Muslims as al-Haram al-Sharif and contains the al-Aqsa Mosque, the third-holiest site in Islam.
Orthodox Jewish campaigners in Israel are challenging a longstanding ban on Jews praying at the compound. Last month, a prominent Jewish activist was shot and wounded by a Palestinian gunman.