Coming from different directions, a huge numbers of Israeli tanks entered the city on early Friday, added the correspondent.
A Palestinian youngster was injured by Israeli fire during the invasion in Beit Forik village, east Nablus. The forces have also demolished the house of Said Hanani, the human bomber of the Tel Aviv blast on Thursday, and launched search operations in the city.
Israeli forces have also carried out arrest operations in the Old city and al-Ein refugee camp, near Nablus.
Day of violence
The Nablus invasion comes after a day of violence as five people including two senior leaders of a Palestinian resistance group were killed in Gaza City while five died in an explosion at a bus stop outside Tel Aviv.
Leader of the Palestinian Islamic Jihad resistance group Moqled Hamid, an associate and at least three other Palestinians were killed and seven people wounded, in a missile attack by Israeli helicopter gunships on a car in Gaza city.
Moqled was the commander of Islamic Jihad's armed wing. The associate was a top deputy in Jihad's Jerusalem Brigades.
Palestinian medical sources and witnesses said the gunships fired two missiles at a car on al-Jalah Street, in a northern district of the city.
The air strike was followed 40 minutes later by a bomb detonated by a Palestinian resistance fighter on a bus stop outside Israel's main metropolis Tel Aviv that killed four people along with the bomber.
Responsibility for the bombing was claimed by another resistance group, the Popular Front for the Liberation of Palestine (PFLP).
Three of the Israelis killed were soldiers, reported our correspondent in Ram Allah. "The operation must have targeted the Israeli military, as most of the injured were also soldiers," the correspondent added.
Tel Aviv blast responsibility
claimed by PFLP
Palestinian Prime Minister Ahmad Quraya condemned both the Israeli air attack and the Tel Aviv bombing.
"The prime minister and the government condemn the cycle of violence and counter-violence, of which the latest episode is the murder of five citizens in Gaza by Israeli helicopters and an attack on a bus stop that has left people dead and wounded tonight in Tel Aviv," a Palestinian cabinet statement said.
"Regretting the continuation of the cycle of assassinations,
liquidations and attacks against civilians on both sides, the prime minister calls for a stop to this bloody circle and the conclusion of a reciprocal ceasefire," it added.
Quraya also called for the "immediate resumption of applying the roadmap," the internationally drafted peace plan unveiled last summer.
Israel slapped a blockade on the occupied West Bank and Gaza Strip. A military spokesperson said they would decide on Friday how to allow out hundreds of pilgrims who flocked to the West Bank city of Bethlehem, believed to be the birth place of Jesus Christ, for Christmas.
The United States late on Thursday called the latest bombing in Israel a "wanton act of terror" and said there was an "urgent need" for Palestinians to act to curb terrorist activities.
"The United States strongly condemns the 25 December suicide bombing in Tel Aviv," State Department spokesman Richard Boucher said in a statement. "We extend our heartfelt sympathy to the victims of this wanton act of terror and their families."
"Such international bias encourages Sharon to continue his crimes"
Khalid al-Batsh, an Islamic Jihad leader
In an interview with Aljazeera, Khalid al-Batsh, an Islamic Jihad leader lashed out at the United States "bias" towards Israel.
"The US administration has condemned Tel Aviv resistance operation which killed four Israelis, but ignored the Gaza raid which led to the assassination of two Jihad members and three other Palestinians," said al-Batsh .
"Such international bias encourages Sharon to continue his crimes," he added.
Al-Batsh also criticised the absence of an Arab World's firm position. "Why did not the Arab League or the Arab countries condemn the Gaza raid?" he said.