Israeli troops have swooped on several banks in Ramallah in what officials say is their biggest recent move to choke off funding for Palestinian militants.
An Israeli soldier fires into the air during Wednesday's clashes
More than $3 million was removed from bank vaults during the action, Israeli security sources say.
Protesters hurled stones and petrol bombs at Israeli troops, who responded with tear gas and rubber bullets.
On Tuesday, Israel's parliament heard accusations that the militant group Hezbollah funded recent bus bombings.
Several districts in central Ramallah were placed under curfew during the raid by Israeli troops, in what was their biggest operation in the central West Bank city for months.
Palestinian medical officials say 42 people were injured in clashes triggered by the Israeli incursion.
Most of the injuries were from rubber bullets, with five people reportedly in a critical condition.
At least three branches were targeted - including buildings used by the Arab Bank and the Cairo-Amman Bank.
The incursion sparked rioting amongst Palestinians
Witnesses say soldiers covered surveillance cameras on the banks' premises before filming the action with their own equipment.
Bank staff and customers were evacuated or held in smaller rooms while money and data - allegedly relating to account holders with militant ties - was confiscated.
Israel has justified earlier bank raids as part of the global effort to disrupt "terror funding".
Fatah in the frame
An Israeli security source described the bank raids as "a very focused activity", adding there were no plans to target Palestinian leader Yasser Arafat in his Ramallah compound.
A military spokesman confirmed an operation was under way in Ramallah and it would be over "within 24 hours".
Palestinian militants' funding was the target of earlier bank raids
The raid follows a swoop earlier on Wednesday on offices used by an Islamic charity in the West Bank city of Tulkarm.
Israeli security officials told the Associated Press that Wednesday's raid primarily targeted funding for the Hamas and Islamic Jihad militant groups.
However, they said they also expected to disrupt funding for the al-Aqsa Martyrs Brigade.
The group, a militant offshoot of Yasser Arafat's Fatah movement, said it was behind a bus bombing on Sunday that killed eight people in Jerusalem.
A similar attack on 29 January killed 11 people.
Fatah leaders were scheduled to have met on Wednesday to discuss reining in the group.