A Palestinian gunman killed two Israelis in a Jewish settler neighbourhood in the West Bank city of Nablus today, military sources said.
Israel Radio said the gunman was also killed when Israeli troops returned fire.
Israel radio said that a militant group affiliated with Mr Arafat's Fatah faction claimed responsibility for today's attack in Nablus.
The violence in Nablus came after Israeli forces killed five Palestinians in separate incidents yesterday, including the stepmother of a militant who was crushed to death when Israeli forces razed their home in the Gaza Strip, Palestinian sources said.
Israeli Prime Minister Ariel Sharon's tough line on the 28-month Palestinian uprising for independence helped his right-wing Likud party to a resounding win in polls last month.
Mr Sharon has accused Palestinian President Yasser Arafat's Palestinian Authority of orchestrating and financing violence, a charge denied by Palestinian officials.
At least 1,816 Palestinians and 700 Israelis have been killed since the Palestinian revolt for independence began in September 2000.