The Israeli army says one of its officers, two Israeli civilians and three Palestinians have been killed in clashes in the West Bank and Gaza Strip.
There was confusion about which groups the Nablus men belonged to
In Nablus on the West Bank, an Israeli officer and a Palestinian militant were killed in a shoot-out.
In the Gaza Strip, a Palestinian gunman hurled hand grenades and sprayed automatic weapons fire at the Karni crossing point, killing two Israeli workers before being shot dead, the army said.
And another Palestinian militant was killed by Israeli troops in the Gaza town of Rafah. Islamic Jihad said Abdel-Hamid Abu el-Eish was one of its field commanders.
The Nablus incident occurred when an Israeli army unit surrounded a building in the early hours of Tuesday and called on three Palestinians inside to surrender.
As the men emerged the third in line, Mazen Freitkh, fired a pistol, killing Lieutenant Daniel Mandel, 24, and wounding another soldier, Israeli officials said.
The Israeli unit returned fire, hitting Freitkh.
Freitkh fled back into the five-storey building in the Rafidiyah district, sparking a siege of several hours.
When Israeli troops stormed the building, they found Freitkh had died of his wounds.
Two Palestinian civilians were also reported wounded in the incident.
The other two alleged militants gave themselves up.
Palestinian sources named them as Nael al-Sakhel and Dia Taqruri, both in their 20s.
There was some confusion about which group the men belonged to.
Palestinian security officials said Freitkh was a local leader of the Ezzedin Al-Qassam brigades, the military branch of Hamas.
But the al-Aqsa Martyrs brigades, an offshoot of Palestinian
leader Yasser Arafat's Fatah movement, claimed Freitkh as a member.
Residents said one of the other men was from al-Aqsa, and the third from Hamas.
Elsewhere in Nablus, Israeli troops arrested Kamil Abu Hnesh, 26, the local leader of the military wing of the radical group, the Popular Front for the Liberation of Palestine.