Israeli soldiers killed a senior Hamas militant in the northern West Bank city of Nablus early on Wednesday.
Palestinian and Israeli sources in Nablus say the two men opened fire from a house on an Israeli patrol, which responded by attacking the building. The witnesses said automatic weapons were found at the site, and the wounded Palestinian was arrested.
The dead man was identified as Ibrahim Abu Awash, said to be a member of Hamas's Izz-el-Deen al-Qassam military wing, who was on Israel's wanted list.
Meanwhile, Israeli media report that 10 would-be suicide bombers from the West Bank have been intercepted over the past month. In recent weeks, the Israeli army has been on high alert for attempts by Hamas and other groups to abduct soldiers for use as bargaining chips to try to win the release of jailed Palestinian comrades.
Israeli radio also reports that 15 wanted persons were arrested overnight in Hebron, Bethlehem and other areas of the West Bank.
Israel withdrew its troops to the outskirts of Bethlehem on Tuesday, ahead of Christmas celebrations in the town, considered the birthplace of Jesus Christ. But its forces are still in six other Palestinian cities in the West Bank, re-occupied after a wave of Palestinian suicide bombings in Israel in June.
Christians in Bethlehem attended Midnight Mass in the Church of the Nativity, but local officials canceled other celebrations. This year, no Christmas tree was erected in Manger Square, and no open air concerts were held, to protest the Israeli occupation. For a second straight year, Israel kept Palestinian leader Yasser Arafat from attending the Midnight Mass.