British targets in the West Bank and Gaza Strip have come under attack, after Israeli forces captured a top Palestinian militant.
Violence escalated against UK targets
Palestinian protesters set fire to the British Council office in Gaza City, angry that UK prison monitors withdrew from a Jericho jail.
Palestinian Authority president Mahmoud Abbas criticised the US and UK for pulling out the prison inspectors.
But the UK government said it acted out of fears for the inspectors' security.
Israeli forces took control of the jail in the West Bank town of Jericho and killed a guard, demanding the handover of militant leader Ahmed Saadat, who is thought to be behind the killing of an Israeli cabinet minister.
They also captured five other militants.
The prison raid has triggered a wave of violence across occupied territories, directed mainly at Western targets.
The Foreign Office is warning against all travel to the occupied territories.
Crowds also attacked the British Council office in Ramallah in the West Bank, although no British employees or Palestinian members of staff were hurt in either incident.
A branch of HSBC in Ramallah was also attacked.
Mr Saadat and another five Palestinian prisoners had been being monitored by British and US inspectors under an agreement made in 2002.
But they were withdrawn on Tuesday for what they described as security reasons.
Some prisoners were eventually marched out of the jail by Israeli forces, but others, including Mr Saadat, initially refused to give themselves up.
Mr Saadat and dozens of others surrendered to the Israeli troops after dark.
Foreign Secretary Jack Straw issued a written statement to explain why the inspectors were withdrawn - a decision he first considered last year.
And, in a statement to the House of Commons, he said the prison monitors had been removed because the Palestinian Authority had ignored repeated requests to guarantee their safety.
Mr Straw said: "Safety of the monitors had to be my overriding concern."
The minister said he had made Palestinian leader Mahmoud Abbas aware of his plans and had urged Israel to show "maximum restraint".
Shadow foreign secretary William Hague said the monitors' safety was paramount but questioned whether sufficient consideration had been given to the consequences of sudden withdrawal.
Veteran Labour MP Sir Gerald Kaufman warned the Israelis about creating "their own do-it-yourself ghetto behind a wall encroaching deeply into Palestinian territory" and maintaining illegal Israeli settlers.
Continuing those actions, together with "pre-election stunts" like the Jericho episode, meant the "chances of peace will be impossible and support for Hamas will rise still further," he said.
Simon Boas, a volunteer for an economic policy research institute in Ramallah, told BBC News the timing of the British move was "unfortunate".
"Either, there must have been some idea of the government knowing what would have happened, having withdrawn the British forces from Jericho, and I think some serious questions need to be asked about that," he said.
"Because it has certainly very much damaged the image of Britain here in Ramallah and in the region."
Sir David Green, director general of the British Council, told BBC News the building in Gaza had been "very badly damaged".
Masked gunmen came into the building and started firing shots in the information centre, he said, but a large group from the presidential guard arrived and staff were vacated.
No staff were hurt in the arson attack
The situation deteriorated, Sir David said, when a larger number of demonstrators, many of them armed, arrived and the building set on fire.
"And according to our centre manger both the ground floor and the second floor are completely burnt out."
Mike Gapes, chairman of the Foreign Affairs select committee, said the British government had repeatedly warned it was unhappy about the safety of wardens.
Ahmed Saadat's lawyer Daniel Machover told BBC News he was "extremely distressed" by the UK's decision to withdraw its monitors, in place because of an agreement between the Palestinian Authority and the US and UK.
"The British monitors withdrew and placed Mr Saadat at great risk of being summarily executed because the Israeli authorities have made it clear that's what they would do if he was going to be released," he said.
"Mr Saadat has never been prosecuted or convicted of any offence."