The six-hour military operation started at 1:00 am on Tuesday when Israeli special forces entered Sabah el-Kheir suburb, west of Jenin, and surrounded the two men in a farmland there.
Eyewitnesses told Al Jazeera that the Israeli special forces closed the area before the army deployed reinforcements, backed by helicopters.
An Israeli soldier was wounded and six Palestinians arrested during the raid.
Israeli forces withdrew from Jenin city following the raid that is seen as a strong blow to the movement, particularly its military wing al-Quds Brigades, Al Jazeera reported.
Jawabreh and Abu Ali were transferred to Khalil Suleiman hospital in Jenin as the Islamic Jihad called on all citizens to march in their funeral procession.
Al-Quds Brigades said that it will continue its resistance vowing to retaliate for the assassination of its two leaders.