Israeli troops were today hunting a suspected Palestinian who killed five members of an Israeli family at their West Bank settlement, officials and media reports said.

An Israeli army spokeswoman told AFP the killer had entered Itamar settlement near Nablus in the north of the West Bank and murdered five people overnight.

Media reports said the five -- a baby girl of three months, two children aged three and 11 years old, and their parents -- were stabbed to death in their beds.

The army radio said two children in the house had been spared and a third, a girl of 10, had discovered the massacre when she arrived home late and alerted neighbours.

The radio said the killer or killers had managed to get into the settlement in spite of an electric fence surrounding it.

One paramedic at the scene told Israeli news website Ynet that one of the children still had a pulse when they arrived, but that they had been unable to resuscitate him.

"It's a very serious attack, a whole family has been massacred by terrorists," regional military commander General Avi Mizrahi said on army radio.

"We are hunting those responsible and we think we will lay hands on them very quickly and they will pay for it."

The radio said Prime Minister Benjamin Netanyahu had been in talks with the heads of the military and security services.

Newly appointed Israeli military commander General Beny Gantz was on hand to direct the manhunt.

Palestinian security sources told AFP soldiers in jeeps had deployed in the sector, sending ambulances to the scene, and said an army helicopter was flying over the area of the attack.

The sources said the Israeli army had blocked all roads leading to Nablus, stopping all vehicles from entering or leaving the city, including Palestinian ambulances.

Israeli troops had entered the Palestinian village of Awarta, near Itamar, carrying out house-by-house searches and holding "many residents" for questioning.

Tensions between Palestinians and Jewish settlers in the area have been extremely high in recent days.

On Monday, Israeli soldiers fired live rounds at Palestinians after they clashed with settlers near Nablus.

Ten Palestinians and a Jewish settler were wounded during the violence, according to Palestinian medical sources and a spokesman for the settlers.

A week earlier, police clashed with settlers in the outpost of Havat Gilad west of Nablus as officers moved in to remove a caravan, a tent and another half-built illegal structure there.

That prompted settlers to firebomb a house in Huwarra village, which saw two Palestinian children taken to hospital for smoke inhalation.

They also smashed up shops and cars in the southern city of Hebron and cut down 500 olive tree saplings that had been planted on the site of a former settlement outpost.

The settlers routinely react when police and soldiers demolish structures in settlements or wildcat outposts in what are known as "price tag" attacks, taking it out on the Palestinians for what they consider "anti-settler" activity by the Israeli government.

Netanyahu on Tuesday warned hardline settlers that such attacks were unacceptable.

The last deadly attack on a West Bank settlement was on August 31 last year, when four settlers were killed near Hebron. Two other Israelis were wounded in an attack the next day in Ramallah.

The following month, the Palestinian Authority of president Mahmud Abbas said those responsible for both attacks had been arrested. They were identified as members of the rival Hamas group that controls the Gaza Strip.

In June 2002, a Palestinian killed five Israelis in an attack on the same settlement, Itamar, that was hit on Friday.

The international community considers Israeli settlements built in the West Bank and east Jerusalem as illegal, and 14 of the 15 members of the UN Security Council last month backed a resolution condemning the Jewish state for continuing settlement activity.

The United States vetoed the resolution, saying it did not think the United Nations was the appropriate forum to address the issue, but reiterated its opposition to Israeli settlement building.