Meanwhile, Israeli troops in more than 20 military vehicles, backed by helicopters, have raided the town of al-Zababda, east of Jenin city. They are surrounding a hostel where students of the Arab-American University reside.
More than a dozen explosions and several exchanges of fire were heard as soldiers in 15 Jeeps raided an eastern part of Nablus, witnesses said.
During the raid, troops killed Amjan al-Hinawi, 34, Aljazeera's correspondent reported.
Al-Hinawi was a commander in Hamas's military wing, the Izz al-Din al-Qassam Brigades. Hamas has vowed to avenge the killing.
The correspondent reported that troops surrounded the home of al-Hinawi and ordered his family out before killing him.
Rice met Palestinian and
Israeli officials in Jerusalem
Witnesses said al-Hinawi had been shot in the head at close range. Another report stated that while most members came out of the house, al-Hanawi refused and tried to escape.
He was shot as he tried to climb a fence, a report from the Associated Press said.
The neighbours said that army dogs attacked several family members. The army said it was investigating the reports.
But military officials confirmed there had been an arrest raid in Nablus overnight, and that one person opened fire on troops and tried to escape before being shot.
The unidentified officials did not identify the target of the raid, during which eight Palestinians were detained.
In the Gaza Strip, a member of the al-Nasir Salah al-Din Brigades, of the Popular Resistance Committees, was killed by Israeli gunfire on Monday.
Two others were injured when the troops opened fire on the men near the al-Buraij refugee camp east of Gaza City, the movement said.
Israeli soldiers in army vehicles
have raided Jenin
The Israeli army, claiming the Arab-American University building in Jenin hosted Islamic Jihad activists, has opened fire on the hostel.
Israeli helicopters hovered over the area at a low altitude, while soldiers, using loudspeakers, called on those inside to turn themselves in, reported Aljazeera correspondent Ali al-Sumodi.
Troops fired on stone-throwing youths with bullets and rubber bullets, wounding two Palestinians, he said.
Also on Monday, about 20 Israeli military vehicles raided the city of Tulkarim and refugee camp in the northern West Bank and arrested two Palestinians, Aljazeera reported.
The raids came hours before US Secretary of State Condoleezza Rice on a visit to the region met Israeli and Palestinian leaders in an effort to revive peace talks.
Israel has conducted similar raids on nearly a nightly basis since late last month.
Palestinians criticise the raids, saying they obstruct their efforts to restore order in the occupied territory to prepare the ground for peace talks under a US-backed road map plan.