Israel said it "hit" three Palestinians in response to gunfire fire as troops demolished the home of Mohammed Abu Shahin, who Israel accuses of shooting dead an Israeli settler in the West Bank in June.

Palestinian health officials said two Palestinians were killed and one wounded by Israeli gunfire.

The Israeli army said it came under attack by hundreds of Palestinians throwing rocks and Molotov cocktails during the early morning demolition.

Since the beginning of October Israeli forces have killed 83 Palestinians. Israel says about half of those deaths were Palestinians involved in knife, gun and car ramming attacks that have killed 12 Israelis.

Israel has responded to the most recent spate of violence with harsh security measures, including reverting to the controversial policy of demolishing the homes of Palestinians accused of serious crimes. On Saturday, Israeli troops demolished four homes belong to Palestinian attackers.

Rights groups and Palestinians argue the practice is counterproductive and inflicts collective punishment on whole families who had nothing to do with a crime.

Israel says the practice acts as a deterrent.

cw/jil (AFP, AP, Reuters)