Hundreds of Palestinian guards and inmates surrendered at a prison compound in the West Bank town of Jericho, after it was stormed by Israeli troops.
Israel is trying to seize militant Ahmed Saadat, blamed for the killing of a minister.
But some detainees, including Mr Saadat, are refusing to leave the prison.
The Israeli military then fired a tank shell and a helicopter missile at the prison. A bulldozer also demolished walls outside.
The Israeli raid sparked angry protests throughout the Palestinian territories.
The mother of detainee Ahad Abu Ghulmi demonstrated in Nablus in front of a picture of her son with Mr Saadat.
Armed members of the Popular Front for the Liberation of Palestine, which Mr Saadat heads, demonstrated in Jenin with other factions.
Gunmen protested against the raid on the streets in Gaza City.
They later set ablaze the British cultural centre in Gaza and stormed an EU compound.