A 17-year-old Palestinian teenager and his grandfather have been shot dead by Israeli troops in the West Bank town of Nablus.
Israel has vowed to hunt down Palestinian militants
The army said the two were part of a group throwing firebombs at troops looking for militants in Nablus.
Palestinian security officials they were just walking through the neighbourhood.
A third Palestinian was earlier killed in a shootout with Israeli soldiers in the West Bank town of Tulkarm.
The deaths bring to at least 27 the number of Palestinians killed since last Saturday when Palestinian militants blew up an Israeli tank killing its four crew.
In the Gaza Strip, the Israeli army took measures to divide the area into three separate security zones.
The move comes a day after Palestinian militants fired rockets from Gaza into Israel to retaliate against an Israeli raid in Gaza, in which 11 Palestinians were killed.
The IDF [Israeli Defence Forces] activities... are geared to putting the Gaza Strip terror infrastructure out of business
However, more rockets were fired on Israeli targets outside Gaza on Thursday.
In London, the quartet of mediators on the Middle East met Palestinian cabinet ministers to discuss a peace plan to end the violence.
The group - which includes the United States, the European Union, Russia and the United Nations - urged the Palestinian Authority to do more on civil reform.
It called on Israel to do more to ease the humanitarian situation in the West Bank and Gaza.
Correspondents say many Palestinians see recent Israeli raids as a precursor to a full takeover of Gaza - a move the Israeli defence minister has said is being considered.
'Fight against terror'
On Thursday, the Israeli army set up roadblocks and restricted Palestinians crossing from Gaza into Israel.
"Israel cannot tolerate the continued Qassam missile attacks... as well as other Palestinian attacks on Israelis living in and beyond the Gaza Strip," an adviser to Prime Minister Ariel Sharon told the Ha'aretz newspaper.
Mediators want Israel to relieve Palestinian suffering
"The IDF [Israeli Defence Forces] activities of the past few days are geared to putting the Gaza Strip terror infrastructure out of business," David Baker said.
But Palestinians have described the Israeli moves as collective punishment which will cause hardship to innocent civilians.
Palestinian officials said they threatened diplomatic efforts to revive the peace process.
In the latest effort in London, members of the quartet demanded a deepening of the reform of the Palestinian Authority.
The group welcomed considerable Palestinian progress, especially in implementing higher standards of financial transparency and accountability.
They also welcomed Palestinian leader Yasser Arafat's decision share power, and urged the appointment of a "credible and fully empowered prime minister" as part of institutional reforms intended to prepare for statehood by 2005.
A statement said the draft peace plan on the creation of a Palestinian state should be unveiled as soon as possible - after the formation of a new Israeli Government.
Ha'aretz newspaper reported that Israel wanted to make more than 100 changes to the so-called "road map", including stringent restrictions on any future Palestinian state as well as cancelling all specific timetables.