Israeli raids into the West Bank and Gaza Strip have left five Palestinians and an Israeli soldier dead and at least five Israeli soldiers wounded.
Several soldiers were hurt in the raid which killed two militants
Tanks supported by helicopter gunships moved into Bureij refugee camp in the Gaza Strip, sparking fierce fighting.
Two militants were killed and a three-year-old Palestinian child died, Palestinian sources said, while one of six Israeli soldiers wounded in the raid later died from his wounds.
Two more Palestinians were killed when Israeli troops surrounded a building in the West Bank city of Hebron where members of the radical Islamic Jihad group were hiding.
The raid took place as Israel tightened its security blockade of the Palestinian territories and cancelled all Palestinian travel permits over fears of attacks during the upcoming Jewish New Year.
The violence follows two weeks of relative calm after a spate of Palestinian suicide bombings and strikes against Palestinian militants by Israeli forces.
It also came a day after the spiritual leader of the militant group Hamas, Sheikh Ahmed Yassin, ruled out a truce with Israel.
Sheikh Yassin delivered his statement in Gaza, in his first public appearance since Israel attempted to assassinate him on 6 September.
Vow of revenge
In Hebron, Israeli troops backed by tanks and jeeps surrounded a building in a field where Diab Shweiki, the Islamic Jihad leader in Hebron, and his deputy, Abdel Rahim Talahmeh, were hiding.
The Israelis say their troops entered the Bureij camp to arrest a local leader of Islamic Jihad and their soldiers were fired on.
Nabil Abu Jaber, a leader of Islamic Jihad's armed wing, said his group would avenge the deaths.
"The Islamic Jihad is ready to respond to Israeli killings and all our cells have a free hand in Gaza and the West Bank to respond and to teach the enemies a lesson," he told Reuters news agency.
In Gaza, a Palestinian child in a neighbouring house died of fright during the operation in which two militants were killed, the French news agency AFP quoted Palestinians as saying.
Ahmed Abdel Rahman, an adviser to Palestinian leader Yasser Arafat, told Reuters news agency the raids were frustrating efforts to convince militant groups to declare a ceasefire.
"Israel is escalating violence through assassinations and raids at a time the Palestinian side is seeking calm and a return to a ceasefire," Mr Abdel Rahman said.
The latest raids came after the head of Israel's air force grounded a group of fighter pilots who have refused to carry out air strikes against Palestinians, Israeli media has reported.
The 27 pilots said on Wednesday they would no longer carry out strikes against targets in the Palestinian territories, citing concern over civilian casualties.
The declaration by the pilots, some of whom regularly carry out combat missions, has been condemned by Israeli military leaders.
The Israeli Government's Foreign Affairs and Defense Committee is also due to discuss the pilots' case following the Jewish New Year, Haaretz newspaper reported.