A drone strike during an Israeli military operation in the volatile West Bank city of Tulkarm on Thursday killed three, according to the Palestinian health ministry.

The strike, in the Tulkarm refugee camp, a crowded city township that houses families of refugees who fled during the 1948 Middle East war, targeted armed terrorists, the Israeli military said in a statement.

It said troops confronted fighters and dug up roads to uncover improvised explosive devices buried under the tarmac, while residents said gunfire and explosions could be heard throughout the morning.

Clashes in the occupied West Bank have risen sharply since the start of the Gaza war last year as Israeli forces have stepped up operations against armed militant groups including Hamas and the Iranian-backed Islamic Jihad.

Thousands of Palestinians have been arrested and at least 637 killed, many of them armed fighters but many others stone-throwing youths or uninvolved civilians.

At the same time, more than a dozen Israelis have been killed by Palestinians in the West Bank and East Jerusalem.

A Palestinian man was killed last week in Tel Aviv while apparently planning to carry out a bombing attack in the city had been identified by Israeli security authorities as a resident of Nablus, another flashpoint West Bank city.