An undercover force opened fire on a vehicle containing the gunmen, killing Ashraf al-Saadi, 25, a top leader of the group's armed wing in the West Bank, Mohammad Abu Naasa, 22, and Alaa Breiki, 26, Palestinian security sources said.

About 30 army jeeps then rolled into Jenin's refugee camp and were carrying out house-to-house searches for other militants, the sources said.

An Israeli security source said an undercover unit had gone to Jenin to arrest the three men, but "al-Saadi identified them and fired," lightly wounding one soldier.

"The troops opened fire and killed them," the source said, adding that the trio was "involved in planning and carrying out attacks against the army and planning suicide bombings."

"The Islamic Jihad cell in Jenin was also responsible for the attempted suicide bombing in Tel Aviv last week," the source said.

Wednesday's operation comes a week after Israeli security forces arrested a member of Islamic Jihad from a village on the outskirts of Jenin carrying a suicide belt south of Tel Aviv.

A radical Islamist movement considered close to Iran, the Islamic Jihad has claimed responsibility for most of the suicide attacks in Israel over the past two years, including the January 29 blast in the Red Sea resort of Eilat that killed three Israeli civilians.