Israel says the harsh measures were re-imposed on Monday in response to the killing of three Israelis and has halted all communications with the Palestinian Authority, Aljazeera learned.
The Israeli army killed a Palestinian in the West Bank and injured a bystander on Sunday.
The re-imposition of travel restrictions in the West Bank and the resumption of military incursions were part of the decisions taken at high-level meetings led by Defence Minister Shaul Mofaz.
Aljazeera.net's reporter in the West Bank, Khalid Amayreh, said an anonymous caller phoning a western news agency in Gaza City claimed that Fatah's al-Aqsa Martyrs Brigades carried out the attack as a reprisal for the recent killing by the Israeli army of more than 10 Palestinians in the Gaza Strip and the northern West Bank.
However, a spokesman for the Brigades in the West Bank later denied any connection to the incident.
An Israeli army source quoted by the Ha'aretz newspaper said that it was more likely that Hamas, not Fatah, carried out the ambush in retaliation for the killing of several Hamas fighters in the Gaza Strip in September.
Hamas said it remained committed to a de facto ceasefire reached between Israel and the PA earlier this year.
Israelis, Palestinian killed
The three Israelis were killed in two drive-by shootings. The first killed two Israelis, Matat Adler, 21, and Kineret Mandel, 23, at a bus stop near Jewish settlements.
The second killed a 15-year-old Israeli, Oz Ben Meir, in another area.
Also on Sunday, Israeli soldiers killed a Palestinian and wounded a bystander in the northern West Bank town of Jenin.
Palestinian hospital officials said Nihad Abu Ghanim, 27, died after being shot in the head, abdomen and chest.
"We (Israel) will change the policy of how they (Palestinians) use the roads - we will demand that they use public transport rather than private cars"
Israeli defence source
A witness said two Israeli army Jeeps drove up to Abu Ghanim while he was driving down the road and shot him.
The Israeli army, however, said Abu Ghanim was killed when its forces spotted an armed Palestinian. The man shot at them and they returned fire, killing him, the army said.
Abu Ghanim was an Islamic Jihad activist.
Freedom of movement
At a late-night meeting in Tel Aviv with the military's top brass, Mofaz decided on a series of measures to clamp down on Palestinians in the West Bank, one of which was to ban private Palestinian vehicles from intercity roads throughout the West Bank.
"We (Israel) will change the policy of how they (Palestinians)use the roads - we will demand that they use public transport rather than private cars," an Israeli defence establishment source told AFP, saying the move would primarily affect the southern part of the West Bank.
The Israeli army would also step up military operations and encircle towns and villages in the southern West Bank, "largely around Bethlehem and Hebron" Mofaz said, without giving further details.
Exits from Bethlehem and Hebron will be blocked, the officials said on condition of anonymity because they are not allowed to speak to reporters.
Israel says it has re-imposed the restrictions and reversed a relaxing of restrictions implemented since the beginning of the Muslim month of Ramadan two weeks ago, restoring limitations that crippled the Palestinian economy and caused widespread hardships.
Israeli occupation forces officially
resumed military incursions
"Israel removed roadblocks and made a number of humanitarian gestures to ease up on the Palestinians," said David Baker, an official in the Israeli prime minister's office.
The officials said the new measures would be in effect for the long term.
Palestinian taxi and bus drivers told Aljazeera.net that even unpaved mountainous paths had been closed by army bulldozers, forcing thousands of students, teachers, and civil servants to stay away from their institutions and places of work.
Aljazeera's Palestine bureau chief Walid al-Umari said the Israeli authorities have decided to take the situation in the occupied territories back to what it was two years ago.
In addition, Israel has launched an extensive military campaign, arresting 19 Palestinians, mostly Islamic Jihad activists, in the Yabad area in Jenin, Betunia town near Ram Allah, and in Hebron, he said.
Israel is using the opportunity to press Palestinian Authority (PA) President Mahmoud Abbas to disarm resistance groups ahead of his meeting with US President George Bush.
Government spokesman Avi Pazner said: "What has happened shows the need to disarm these organisations, something which he (Abbas) has not done until now," Pazner told AFP.
"It will be difficult for him to explain [to Bush] why he has not done this."
Abbas has rejected the pressure to disarm the groups, saying that it would result in civil war and that he prefers negotiations since the truce agreed upon in Cairo in February has proven to be successful.
Senior Palestinian officials criticised the roadside attacks, but also condemned the killing of the Jenin armed resistance leader.
"These shootings tend to undermine our efforts to revive the peace process and serves neither the interests of the Palestinians nor the Israelis," senior Palestinian negotiator Saeb Erikat told Reuters.
"We will exert maximum efforts in order to sustain the cessation of violence," he said.