An Israeli soldier was killed and two others seriously injured when their patrol was attacked near Nablus, an Aljazeera correspondent in the West Bank reported.
An Al-Aqsa Martyrs Brigades spokesman in the Balata refugee camp claimed responsibility for the ambush and confirmed that one of their fighters had also died in the attack.
The skirmish came as Israeli occupation troops began a siege of al-Ayn refugee camp to the west of Nablus. Residents have spoken of significant bursts of fire coming into the camp - though there are are no reports of casualties.
Meanwhile, witnesses said 12 tanks had taken up positions about 150 metres inside the desperately over-crowded Rafah camp on Monday evening while another 20 had massed to the south of the camp near the Egyptian border.
Tank shells have been fired, but there were no immediate reports of casualties.
An Israeli military source said occupation forces had launched a "routine raid for weapons' tunnels".
Rafah has been a frequent target for Israeli incursions. Forty-two Palestinians were killed during the last Israeli raid in May.
Boy shot dead
Just hours earlier, Israeli troops shot dead a 14-year-old Palestinian boy in a second refugee camp.
Palestinian security officials said the teenager, Ala al-Shair, was shot dead as he stood in a street in Gaza's Khan Yunis camp.
An Israeli source explained soldiers had opened fire, but only after a mortar struck the illegal Jewish settlement of Neveh Dekalim.
Al-Aqsa Martyrs Brigades say
they ambushed Israeli patrol
The al-Aqsa Martyrs Brigades resistance movement claimed responsibility for the mortar attack that injured one of the colonists.
Earlier on Monday, soldiers killed a Palestinian resistance fighter and wounded another in the West Bank town of Jenin. Khalid al-Hawi, 25, is believed to have been a member of the al-Aqsa Brigades, Aljazeera's correspondent said.