Israeli troops killed four Hamas members in gun battles during raids on Sunday against one of the group's cells in the occupied West Bank, an Israeli military spokesperson said.
An Israeli officer and a soldier were critically wounded in one of the incidents, the spokesperson added.
The shootouts marked the most serious violence between Israel and Hamas since an 11-day Gaza war in May and threatened to raise tensions along the Israeli border with the coastal enclave and in the West Bank.
Israeli officials have long voiced concern that Hamas, which runs the Gaza Strip, intends to gain strength in the West Bank and challenge its rival there, the Western-backed Palestinian Authority (PA), heightening security risks for Israel.
Palestinian President Mahmoud Abbas, whose Fatah party lost control of Gaza to Hamas in internal fighting in 2007, accused Israel in a statement of "field executions against our people".
Hamas called on Palestinians in the West Bank "to escalate resistance against the occupier in all areas" after the raids. A Hamas spokesman said the four men belonged to the group, which Israel and the West regard as a terrorist organisation.
An Israeli military spokesperson said troops carried out five raids in the West Bank "in order to stop a Hamas terrorist organisation cell from operating" and launching attacks.
"Three Hamas terrorists were killed in crossfire in the village of Biddu, southeast of Ramallah," the spokesperson said.
"During the attempted arrest of a wanted suspect in the village of Burqin, a shootout evolved. One terrorist was killed," the spokesperson said, adding that then Israeli officer and soldier were hurt in that incident.
Four other Palestinians were arrested, the spokesperson said.
The Palestinian health ministry said four Palestinians were killed in the central and northern West Bank. The Palestine Red Crescent ambulance service said four other Palestinians were wounded.
En route to New York, where he addresses the U.N. General Assembly on Monday, Israeli Prime Minister Naftali Bennett said the Hamas men were "about to carry out terrorist attacks".
He said Israeli forces "engaged the enemy, and we back them completely".
Israel captured the West Bank and Gaza in a 1967 war. It withdrew troops and settlers from the Gaza Strip in 2005.
The PA, which seeks a Palestinian state in the West Bank and Gaza, exercises limited self-rule in the territory under interim peace deals with Israel.