The army caused extensive destruction in the raid
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Israeli troops arrested at least 13 Hamas members during a major overnight raid in the West Bank city of Nablus, witnesses said.
The army said the operation helped "severely disrupt" Hamas efforts to launch attacks on Israel.
At least four tanks and dozens of military vehicles were involved. Some residents fled their homes.
The troops demolished a four-storey house and another burst into flames after it was hit by a tank shell.
Residents searched through the smoking rubble to recover possessions after the army had left.
The army confirmed firing at the homes, saying it had forced out suspects hiding inside who were later arrested.
The raid came as the Israeli army held back from military operations in the Gaza Strip in order to give the new Palestinian Authority president, Mahmoud Abbas, the chance to clamp down on militants.
Israel has occupied the West Bank and Gaza Strip - home to about four million Palestinians - since 1967, settling about 400,000 of its own citizens in the territories.