Israeli troops have killed a member of Palestinian militant group Islamic Jihad in the northern West Bank.
The man was suspected of planning last month’s suicide attack on a Tel Aviv nightclub, the Israeli army said.
Israeli troops killed him by bulldozing his house after he shot an army dog sent in to flush him out, reports say.
Correspondents say the killing further tests an informal truce that is already strained by a stalled handover of West Bank towns to Palestinian control.
The two sides are arguing over whether Israeli checkpoints on the edge of the town of Jericho should stay in place or be demolished.
At a summit in Egypt last month, Israeli Prime Minister Ariel Sharon agreed to a handover of five West Bank towns and to a tentative halt to military operations in Palestinian areas.
He did not specify whether Israel would continue to target Palestinians when it claimed to have prior intelligence of planned attacks.
Mohammed Abu Hazneh, a 28-year-old alleged to be a member of Islamic Jihad, died after a brief siege in the village of Nazlat al-Wusta in the West Bank.
Palestinian sources confirmed that a man had died.
Nafez Azzam, an Islamic Jihad leader, told the Associated Press news agency the killing could provoke a response ending recent weeks of relative calm.
He said his group would raise the issue with the Palestinian leader, Mahmoud Abbas.
Saeb Erekat, a negotiator for Mr Abbas, said Israel should have allowed Palestinian security to “do their job in these areas” and warned its “actions are only adding fuel to fire”.
Last month’s Tel Aviv blast was a major blow to the informal truce agreed by Israeli and Palestinian leaders earlier in February.
The attack was claimed by Islamic Jihad spokesmen in the West Bank and Damascus, although their colleagues in the Gaza Strip had denied the group was involved.
Seven people have already been detained by Israeli and Palestinian forces over the bombing.
Israel claims Syria was behind the attack but Damascus has denied any involvement.
Palestinian leader Mahmoud Abbas has condemned the bombing and promised to help track down those responsible.