Jewish couple, three children killed in West Bank
Troops from the Israeli occupation forces set up roadblocks and were searching the area around the settlement of Itamar, near the Palestinian city of Nablus, for the suspect.
A baby was among the five dead, officials said.
"This is the despicable murder of an entire, innocent family, parents and their young ones while they slept in their house," Israeli Prime Minister Benjamin Netanyahu said.
"Israel will not ignore such a contemptible murder and will act aggressively to ensure the security of its civilians and to punish the murderers," he said in a statement. He called on the Palestinian Authority to assist in catching those responsible.
Palestinian Prime Minister Salam Fayyad, whose government demands the removal of settlements in order to establish a Palestinian state, said such violence was never justified.
"There should be no doubt over our position regarding violence. We have rejected it totally and we have always condemned it," Fayyad was quoted as saying by the official Palestinian news agency WAFA.
In a strongly worded statement, the office of U.S. President Barack Obama later called on the Palestinian Authority to condemn the attack, leaving it unclear whether the White House was aware of Fayyad’s earlier comment.
"There is no possible justification for the killing of parents and children in their home," the White House said in its statement. "We call on the Palestinian Authority to unequivocally condemn this terrorist attack."
No group claimed responsibility for the attack but the Islamist movement Hamas in the Gaza Strip said it offered its "full support" to any actions taken against settlers.
However, a senior figure in Hamas’s exile leadership in Syria, Izzat al-Rishq, said: "We had nothing to do with it."
Israelis responded with horror to the attack on the Jewish sabbath, and it may complicate efforts to restart peace talks. These are frozen in arguments over whether Israel should first stop expanding settlements on occupied land, which Western governments view as illegal under international law.
Kabha Ma’awiyeh, one of the first paramedics to arrive on scene, said the family members were stabbed in bed and pools of blood had collected on the floor.
Violence in the occupied West Bank has dropped significantly since its peak during a Palestinian uprising a decade ago.
Tensions in the area had risen earlier in the week when Israeli troops fired live rounds at Palestinians after they clashed with settlers. Ten Palestinians and one Israeli were wounded in the confrontation.
Israel has been loosening restrictions on the movement of Palestinians and goods in the occupied territory but maintains a system of roadblocks and checkpoints.
The army has also limited the scope of its raids against suspected militants in Palestinian towns and villages, handing over some responsibility to Palestinian security forces.
Israeli officials have said Netanyahu, who insists on keeping an Israeli military presence along the West Bank’s eastern border with Jordan in any peace deal, is weighing fresh steps to move the diplomatic process forward.
Israeli media have reported his moves could include a proposal for a Palestinian state inside temporary borders, an option Palestinian leaders have already rejected.
According to the settlers’ YESHA council, about 100 families live in Itamar.
There was a similar attack on the religious settlement in 2002, when a gunman broke into a house and opened fire, killing four members of one family and a neighbor.
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