Early on Monday, the soldiers, who arrived in about 20 military vehicles backed by a helicopter, surrounded several buildings and called on their residents to get out, apparently looking for wanted Palestinian activists, witnesses said.
The troops have begun to demolish a house, a Palestinian official told Aljazeera. The troops also told reporters to leave the area.
Violent clashes erupted in central Nablus city, causing injuries, Aljazeera's correspondent in Palestine, Hasan al-Titi, reported.
Al-Titi said the Israeli military operation was still under way, particularly in the northern mountainous area in Baikar Street, adding that forces had imposed a curfew on Huwara, a town in the south of Nablus.
Palestinian official reaction
Speaking to Aljazeera, Palestinian deputy prime minister Dr Nabil Shaath described the raid as a violation of the Sharm al-Shaikh truce.
"Though Nablus has not been evacuated by Israel, as the case with Jerico and Talkarim, Israel has no right to raid the town and conduct military operations, an act which is contrary to the agreement to maintain a period of calm.
"If there was any move that calls for pre-emptive action to abort it before it takes place, it could have been more rational to contact the Palestinian authority in this respect.
"When Israel raids a town in the pretext of hunting wanted Palestinians, in fact it repeats the same behaviour as an occupying force, thus ignoring all that have been agreed upon in Sharm al-Shaikh", Shaath concluded.
Israeli forces said earlier they were seeking "wanted activists" but had not yet apprehended anyone.
Israeli forces were using police sniffer dogs to search through adjacent buildings while two Israeli Apache helicopters were seen hovering over the city, the correspondent added.
Resistance fighters taking up
position in Nablus on Monday
The raid led to a fierce clash in central Nablus between stone-throwing Palestinian youths and Israeli forces, injuring several Palestinians.
Some suffered injuries due to tear gas while others were hit by rubber bullets, he added.
A military spokeswoman confirmed that the army had moved into Nablus "for a routine operation".
Aljazeera reported the Israeli forces had arrested at least five members of the Fatah-affiliated al-Aqsa Martyrs Brigades as well as activists of al-Awda Brigades.
One of them is Firas al-Tanbur, a member of al-Awda Brigades in Nablus, who is one of Israel's most wanted Palestinian resistance activists.
The raid came a few hours after Palestinian resistance groups fired dozens of mortar shells at Israeli settlers and troop positions in the Gaza Strip.
Resistance groups said the mortar fire was in response to the killing of three Palestinian youths by Israeli soldiers in the southern Gaza town of Rafah on Saturday.
Military sources said on Sunday that 25 mortar shells had been fired at Jewish settlements, causing damage to three houses but no injuries.
Illegal settlements have been a
favoured target for retaliation
Hamas, Islamic Jihad, al-Aqsa Martyrs Brigades, Ahmad Abu al-Rish Brigades and the Democratic Front for the Liberation of Palestine all have confirmed they had shelled settlements in the Gaza Strip in retaliation for the Israeli "crime".
Interviewed by Aljazeera regarding Monday's Israeli raid, the governor of Nablus, Major Mahmud al-Aalul, said: "This criminal attack has caused huge destruction of homes on top of the 10 Palestinians left wounded and the 15 others detained by the Israelis.
Asked about the possible motives behind the Israeli operation, al-Aalul said: "We do not know. Israel's raids have never stopped - neither in Nablus nor anywhere else - despite what we hear in the media about the period of calm, in which the only side that sticks to its obligations is the Palestinian side.
"Israeli violations are continuing on a daily basis despite the allegations and the justifications they invent whenever they commit crimes."
Israeli soldiers wounded 10 and
detained another 15 Palestinians
Asked if the Palestinian factions are threatening to revert to armed resistance, the Nablus governor said: "We also see a Palestinian interest in the period of calm while we seek to preserve Palestinian national unity.
"The whole world is watching the Israeli violations, including the killing of innocent Palestinian children who were playing football. Palestinian self-restraint is not unlimited with regard to events such as those that occurred in Tulkarim and Nablus."
Asked how Israel could be made to meet its commitments, al-Aalul said: "Since the balance of power remains unchanged, Israel will continue to resort to the logic of force. It is high time for a political movement to emerge to help correct Washington's pro-Israeli alignment.
"We seek a wider, more effective European and international role in the peace process."