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Israeli police shot and killed three Palestinians in a pre-dawn raid to arrest a suspected militant in the Qalandiya refugee camp.
Peace talks between Palestinians and Israelis were set to continue Monday, despite clashes that left three Palestinians dead.
Israeli soldiers carried out a pre-dawn raid in the Qalandiya refugee camp, killing three Palestinians and wounding 19 more while attempting to capture a suspected militant.
Palestinian witnesses told The Los Angeles Times that undercover soldiers entered the camp around 3 a.m., reportedly looking for a Fatah militant who was released from Israeli prison.
When local residents began throwing stones and petrol bombs, Israeli troops responded with "riot dispersal methods."
Israeli military spokesperson Lt. Col. Peter Lerner told the BBC the operation was meant "to detain a terror operative," but that the hundreds of Palestinians posed an "imminent threat to" the lives of the police.
The AP reported that Youssef Khatib was arrested in the raid.
The three men killed Monday were given funerals, with Palestinian militants firing their weapons into the air in salute.
The deadly incident comes during renewed efforts by the United States to broker peace talks between the Israelis and Palestinians.
A Palestinian official told the Associated Press that the peace talks were postponed in protest of the deaths.
However, the US State Department later said talks had not been canceled.
The last round of peace talks ended without success years ago, and reports suggest there has been no significant progress this time around.
Palestinian Prime Minister Rami Hamdallah condemned Monday's incident in a statement.
"Such a crime proves the need for an urgent and effective international protection for our people," he said.
Palestinian Authority President Mahmoud Abbas' spokesman responded to Monday's clashes with: "The series of Israel crimes and new settlement tenders constitute a clear message on the real Israeli intentions towards the peace process, and there will be negative consequences to these actions."