The Israeli army told AFP a military operation was ongoing in the Jenin camp, a stronghold of Palestinian armed factions in the north of the occupied West Bank.
The Palestinian health ministry said five others were wounded in Jenin by Israeli gunfire.
Saturday’s raid comes a day after Israel said it had killed Raad Hazem, 28, the alleged gunman who went on a shooting spree on Thursday in a popular nightlife district of Tel Aviv, killing three Israelis and wounding more than a dozen others.
After the attack in Tel Aviv, Israeli Prime Minister Naftali Bennett said he had given security agencies “full freedom” to curb a surge in violence since March 22.
“There are not and will not be limits for this war,” Bennett said on Friday, speaking hours after a gunman opened fire on a street of crowded bars and restaurants.
“We are granting full freedom of action to the army, the Shin Bet (the domestic security agency) and all security forces in order to defeat the terror,” he said.
A total of 14 people have been killed in attacks in Israel since March 22, including some carried out by assailants linked to or inspired by the militant Islamic State group.
Over the same period, at least 10 Palestinians have been killed.
Palestinian movement Hamas, which controls the Gaza Strip, and the Islamic Jihad group praised the Tel Aviv attack — drawing criticism from the UN — but did not claim responsibility.
Thursday’s deadly attack came amid heightened tensions during the holy month of Ramazan.
Last year during Ramazan, clashes that flared between Israeli forces and Palestinians visiting Al Aqsa mosque in annexed east Jerusalem led to 11 days of devastating conflict between Israel and Hamas.
Jenin has been a flashpoint through the long-running Israeli-Palestinian conflict.
Earlier this month, Israeli security forces killed three Islamic Jihad members when they came under fire during an operation to arrest them in Jenin.
The raid, in which four Israeli soldiers were wounded, followed another deadly attack on March 29 in Bnei Brak, an Orthodox Jewish city near Tel Aviv.
In that attack, two Israeli civilians, two Ukrainian nationals and an Arab-Israeli policeman were reportedly killed.