Israeli extremists caused widespread damage in a wave of attacks on Palestinian towns that lasted from Tuesday night until Wednesday night in revenge for the killing of four Israelis by Palestinian gunmen outside a nearby settlement in the territory.

Scores of Israeli arsonists entered the Palestinian communities closest to the site of the shooting, setting fires that damaged dozens of cars, buildings and farmland, and spurring confrontations with Palestinian villagers. At least one Palestinian was shot and killed, and 12 others were injured, some of them in clashes with the Israeli security forces, according to the Palestinian health ministry.

Prime Minister Benjamin Netanyahu called the settler attacks unacceptable, saying: “The State of Israel is a state of law. The citizens of Israel are all obligated to respect the law.”

But Mr. Netanyahu also attempted to assuage hard-line allies in his far-right government by announcing that he would immediately advance plans to build 1,000 new homes in Eli, the settlement in the West Bank close to the attack on Tuesday by Palestinian gunmen.

Mr. Netanyahu said the decision, which will require further government approvals before construction begins, was a direct response to the attack. Two fighters from Hamas, the Islamist militia that controls the Gaza Strip, killed four Israeli civilians at a restaurant and gas station next to Eli, before being killed themselves.

“Our answer to terrorism is to strike at it forcefully and build up our country,” Mr. Netanyahu said in a statement that was also issued on behalf of his defense minister, Yoav Gallant, and finance minister, Bezalel Smotrich, a far-right former settler activist.

The Israeli military later conducted a rare drone strike in the northern West Bank on a car that it said was carrying a group of militants that had recently fired on an army checkpoint. The military said it was the first drone strike in the territory since 2006. Three people were killed, Palestinian news media reported.

Mr. Netanyahu’s response highlighted the tension between his efforts to please pro-settler figures in his governing coalition — the most nationalist and socially conservative in Israeli history — and his simultaneous goal of strengthening Israel’s new diplomatic ties with Arab governments, which oppose the entrenchment of Israeli control over the West Bank.

Mr. Netanyahu’s settlement plan won praise from right-wing coalition partners, many of whom want him to annex the territory. Some of them have previously excused settler violence, which they see as a legitimate response to Palestinian attacks.

But Mr. Netanyahu’s response is likely to worsen Israel’s relations in the Arab world, where leaders want him to reduce tensions in the West Bank, and had already expressed anger this week at an earlier Israeli decision to expand and expedite settlement construction.

This week, Morocco postponed a long-awaited diplomatic summit with Israel in protest of Mr. Netanyahu’s settlement policy, diplomats from Israel and other countries said on Wednesday.

Like Bahrain and the United Arab Emirates, Morocco signed a landmark diplomatic agreement with Israel in 2020, ending years of diplomatic isolation for Israel in the region — and the assumption that Israel and Arab governments would not be able to make peace until there was a resolution to the Israeli-Palestinian conflict.

But while the three Arab countries have since hosted Israeli ministers and increased military cooperation with Israel’s government, they appear ambivalent about further deepening ties while Mr. Netanyahu’s administration continues its hard-line approach to the Palestinians.

Similar concerns are expected to slow Mr. Netanyahu’s efforts to form formal ties with Saudi Arabia, despite a major push by the Biden administration to forge such a deal.

The arson on Wednesday was centered in the village of Turmusayya, a frequent target of settler reprisals where many Palestinian residents also hold U.S. citizenship. In interviews broadcast by the Palestinian news media, one resident said that her home had been set on fire while children were still inside. Residents called on the U.S. ambassador in Jerusalem, Thomas R. Nides, to inspect the damage in person.

Palestinian outlets reported that at least nine other Palestinian villages were attacked by settlers who smashed shop windows, threw stones and sometimes set up roadblocks, assaulted Palestinians and fired bullets at them.

Palestinians accused the Israeli security forces of standing by as the settlers attacked, and even engaging in some of the violence itself.

In a statement, the Israeli police acknowledged shooting one Palestinian, but said that its officers had opened fire only after Palestinian rioters disrupted efforts to put out fires. The Israeli military said it had acted to prevent clashes between Israelis and Palestinians, and condemned the violence by settlers.

The violence drew comparisons with an earlier wave of attacks in February, when a deadly shooting by another Palestinian spurred Israeli vigilante attacks on some of the same villages. The attackers damaged hundreds of cars and buildings and killed at least one Palestinian, but drew an ambivalent response from far-right Israeli lawmakers. Some of them played down the violence, and a senior minister said the state should have retaliated instead of the settlers.

Israel has occupied the West Bank since 1967, when it captured the territory from Jordan during the Arab-Israeli war. The territory is the focus of recurrent violence because its Palestinian residents want it to form the backbone of a Palestinian state. That goal has been undermined by Israel’s military occupation and its construction of hundreds of settlements that most countries consider a violation of international law.

Negotiations to achieve a peaceful resolution to the conflict ended in 2014, with the leadership of both sides deeply divided about how to proceed. Violence has surged there over the past two years, as young Palestinians grew more frustrated at the entrenchment of the occupation and the lack of equal rights, and settlers became more empowered by the increased role of their far-right allies in government.

An attack by one ethnic group typically prompts a response from the other, creating a violent cycle that few leaders, either in the region or abroad, have the ability or energy to break.

Hiba Yazbek contributed reporting from Jerusalem.

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