Israeli Defence Minister Binyamin Ben Eliezer said the army was "imposing a total blockade of the West Bank. Nobody enters and nobody leaves."
Just hours after the announcement, a car bomb exploded near the northern town of Umm el Fahm, killing one person and wounding several others, police said.
Israel's army also said it had arrested a regional commander of the radical Islamic group Hamas in Jenin, one of the towns the army has re-occupied.
A report quoting Israeli public radio said Mazen Fukha was suspected of planning the suicide bomb attack on a bus in northern Israel on Sunday, which killed nine Israelis and injured around 40 others
Continuing violence
Movement will be completely restricted in the towns of Jenin, Nablus, Tulkarm, Qalqilya and Ramallah, with the exception of medical and humanitarian cases, according to an Israeli army statement.
The army also said it would cordon off the town of Rafah, a frequent flashpoint of violence, to isolate it from the rest of the Gaza Strip.
The announcement came amid continued bloodshed.
On Monday afternoon a man was killed and several wounded after a car exploded at a junction just outside the northern town of Umm el Fahm.
"It was apparently a work accident," a police spokesman said, using the Israeli term for an incident when a suspected bomber is killed when their device goes off prematurely.
An Israeli couple was shot dead early on Monday in the West Bank, while driving on a road north of Ramallah. Two of their children were also wounded in the attack.
In a separate incident, two Palestinians were killed when the Israeli army attacked a house in Burka, according to Palestinian sources.
On Sunday at least 10 Israelis died in a wave of attacks by various Palestinian militant groups.
'Fight without mercy'
In recent weeks, the army had begun to ease the closure and curfew measures that kept 700,000 Palestinians largely confined to their homes.
Recent violence
MONDAY:One man killed in car bomb near Umm el Fahm
Israeli couple killed in a car ambush near Nablus
Two Palestinians killed in an Israeli army attack on a house in Burka
SUNDAY: 10 dead and 40 injured in a suicide attack on a bus near Safad
A gun attack on a lorry in Jerusalem leaves three dead
Four Israelis injured when an explosive device hits a jeep near Ramallah
Armed Palestinian shot dead in Gaza
But following Sunday's attacks, the Israeli Government cancelled all planned meetings with Palestinian officials and promised a "fight without mercy" against militants.
In the worst single incident on Sunday, a suicide bomber killed nine people and injured more than 40 others in a bus attack outside the town of Safad in northern Israel.
Many of the passengers were soldiers returning to their bases after the weekend.
Deadly campaign
The spate of attacks pointed to a concerted effort by several militant groups in response to the killings of a Hamas leader and 14 other people in an Israeli bombing in Gaza last month.
Hamas said it carried out the bus attack, and also claimed responsibility for the bombing of Jerusalem's Hebrew University last Wednesday which killed seven people, five of them Americans.
Israeli Prime Minister Ariel Sharon, who was in a weekly cabinet meeting when he heard of Sunday's bus explosion, said Israel would "continue to act against terrorism in any way that we find it".
The Palestinian leadership condemned the bus attack as a "terrorist operation".