Israel’s defence minister has signalled that the military would stop its air strikes if Palestinian militant groups halted rocket attacks, a day after the deadliest Israeli raid in decades raised the prospect of a major flare-up in fighting.

After a limited exchange of Palestinian rockets and Israeli air strikes on Gaza overnight, residents of Jerusalem were on edge on Friday morning as they waited to see what comes next.

Israeli defence minister Yoav Gallant instructed the military to prepare for new strikes in the Gaza Strip “if necessary”.

The bombardments followed an Israeli raid in the flashpoint Jenin refugee camp, which turned into a gun battle that killed at least seven militants and a 61-year-old woman and sparked clashes elsewhere that saw Israeli forces kill a 22-year-old north of Jerusalem.

Palestinians burn tyres and wave the national flag during a protest against a Israeli military raid in the West Bank city of Jenin, along the border fence with Israel, east of Gaza City
Palestinians burn tyres and wave the national flag during a protest against a Israeli military raid in the West Bank city of Jenin, along the border fence with Israel, east of Gaza City (Fatima Shbair/AP)

The escalation in the decades-long Israeli-Palestinian conflict created an early test for Prime Minister Benjamin Netanyahu’s new far-right government, which came to office as tensions with the Palestinians soared and has vowed to take a hard line.

The raid also prompted the Palestinian Authority to halt security co-ordination with Israel and drew “deep concern” from the US State Department just days before US secretary of state Antony Blinken was expected to visit the region.

So far, the hostilities have followed a familiar pattern that allows both sides to respond without forcing the other side into a major escalation.

Palestinian militants fired rockets from Gaza towards the south of Israel.

Israel retaliated with non-lethal air strikes on militant targets in Gaza, such as training camps and an underground rocket manufacturing site.

Mr Gallant claimed the military dealt a “tough blow” to Palestinian militants in Gaza and said the army was preparing to strike “high-quality targets … until peace is restored to the citizens of Israel”.

An uneasy calm prevailed around the Al-Aqsa Mosque compound, revered by Jews as Temple Mount.

Palestinian demonstrators burn tyres in a protest against a deadly Israeli army raid at Aida Refugee camp, in the West Bank city of Bethlehem
Palestinian demonstrators burn tyres in a protest in the West Bank city of Bethlehem (Mahmoud Illean/AP)

Tensions at the volatile Jerusalem holy site have triggered violence in the past, including a bloody Gaza war in 2021.

The site is considered both the third-most sacred site in Islam, as well as the site of an ancient Jewish temple that is the holiest place in Judaism.

Israeli police were out in force at entrances to the limestone alleys that lead to the sacred compound, apparently bracing for violence as they searched Palestinian passers-by before weekly noon prayers.

Fadi, a 41-year-old shopkeeper near Al-Aqsa, said he felt the outbreak of violence had frightened residents and subdued the usual Friday morning shopping frenzy.

He declined to give his last name for fear of reprisals.

“The Old City is empty because of all the problems,” he said.

“We’re just trying to work and this happens. It’s like we’re trapped in every way.”

Palestinians clash with Israeli forces following an army raid in the West Bank city of Jenin
Palestinians clash with Israeli forces following an army raid in the West Bank city of Jenin (Majdi Mohammed/AP)

The night before, scuffles erupted between young religious Jews and Palestinians at restaurants and shops in the area.

Tensions have soared since Israel stepped up raids in the West Bank last spring, following a series of Palestinian attacks.

Nearly 150 Palestinians were killed in the West Bank and east Jerusalem last year, making 2022 the deadliest in those territories since 2004, according to leading Israeli rights group B’Tselem.

The same year, 30 people were killed in Palestinian attacks against Israelis.

So far this year, 30 Palestinians have been killed, according to a count by The Associated Press.

Israel says most of the dead were militants.

But youths protesting against the incursions and others not involved in the confrontations have also been killed.

Palestinians clash with Israeli forces following an army raid in the West Bank city of Jenin
Palestinians clash with Israeli forces (Majdi Mohammed/AP)

So far this year, nearly half of the Palestinians killed by Israeli troops or civilians have been claimed as members of militant groups.

Gulf Arab nations offered harsh criticism over the military raid.

Anwar Gargash, a senior diplomat in the United Arab Emirates, warned on Friday that “the Israeli escalation in Jenin is dangerous and disturbing and undermines international efforts to advance the priority of the peace agenda”.

The UAE recognised Israel in 2020 along with Bahrain, which has remained silent on the surge in violence.

At the Damascus Gate entrance to the Old City, young Palestinians milled around as usual and women hawked raisins from their fields.

Palestinians clash with Israeli forces following an army raid in the West Bank city of Jenin
Palestinians clash with Israeli forces following an army raid in Jenin (Majdi Mohammed/AP)

News of the nine killed in Jenin and the overnight rockets blared from phones and radios.

Ibrahim Salameh, a 21-year-old smoking on the steps of Damascus Gate, said he had never been so scared.

Two days ago, he said, his teenage neighbour was killed as police entered the Shuafat refugee camp to demolish an attacker’s home.

“Every day there’s more and more fear, more tension,” he said.

“Somehow I’m living with this idea that at any moment I could be shot dead.”

Palestinian rescuers inspect the site of a damaged building following an Israeli forces raid in the West Bank city of Jenin
Palestinian rescuers inspect the site of a damaged building following an Israeli forces raid in Jenin (Majdi Mohammed/AP)

Israel and Hamas have fought four wars and several smaller skirmishes since the militant group seized power in Gaza from rival Palestinian forces in 2007.

In the West Bank, Fatah, the party that controls the Palestinian Authority (PA) in the territory, announced a general strike and most shops were closed in Palestinian cities.

The PA declared on Thursday that it would halt the ties that its security forces maintain with Israel in a shared effort to contain Islamic militants.

Previous threats have been short-lived, in part because of the benefits the authority enjoys from the relationship, and also due to US and Israeli pressure.

The PA has limited control over scattered enclaves in the West Bank, and almost none over militant strongholds such as the Jenin camp.

Jenin, a city in the north of the West Bank, was an important militant stronghold during the 2000-2005 intifada.

Over the last year, it again emerged as a stronghold of Palestinian militancy and epicentre of Israeli military operations.

Mourners carry the bodies of eight Palestinians, some draped in the flag of the Islamic Jihad militant group, during a joint funeral in the West Bank city of Jenin
Mourners carry the bodies of eight Palestinians, some draped in the flag of the Islamic Jihad militant group, during a joint funeral in the West Bank city of Jenin (Majdi Mohammed/AP)

Several of the Palestinians who killed Israelis in attacks last spring were from the Jenin region in the northern West Bank.

Israel says its raids are meant to dismantle militant networks and thwart attacks.

The Palestinians say they further entrench Israel’s 55-year, open-ended occupation of the West Bank, which Israel captured along with east Jerusalem and the Gaza Strip in the 1967 Middle East war.

The Palestinians claim those territories for their hoped-for state.

Israel has established dozens of settlements in the West Bank that now house 500,000 people.

The Palestinians and much of the international community view settlements as illegal and an obstacle to peace, even as talks to end the conflict have been moribund for more than a decade.