Israeli media says a Palestinian infiltrator stabbed to death a couple and three children in the settlement of Itamar.
Five Israelis, who according to media reports were all members of the same family, have been killed in an overnight attack on a West Bank settlement.
Israeli army officials said on Saturday that a Palestinian got into the Itamar settlement near Nablus in the north of the West Bank and killed five people, but did not elaborate on who the victims were.
Israeli reports suggested that the victims, three children and their parents, had all been stabbed to death in their beds.
Three other children managed to escape and raise the alarm, according to the Israeli news site Ynet.
The army launched a search of the area to find the attacker or attackers, an army spokeswoman told the AFP news agency.
The military also said it was sweeping the area and had set up checkpoints throughout the West Bank. It has also instructed all residents to stay in their homes during the extensive sweeps.
Al Jazeera's Cal Perry, reporting from Jerusalem, said the Israeli military dubbed the assault a "terror attack".
"This grouping of settlements is really seen and has a reputation among the Palestinians as housing some of the most staunch settlers; some of the most religious settlers," he said.
"So, really, the fear now among the Palestians is what kind of backlash this would bring upon them from settlers. The IDF [Israeli army], for its part, is carrying out wide, sweeping operations throughout the West Bank, especially round Nablus.
"We understand, from residents there, that at least one village has already been shut down [and] placed under curfew and the city of Nablus is seeing door-to-door searches being carried out by the Israeli army."
Tension between Palestinians and Jewish settlers in the area has been extremely high in recent days.
On Monday, Israeli soldiers fired live rounds at Palestinians after they clashed with Israeli 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 Havat Gilad outpost 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 settlers also cut down 500 olive tree saplings that had been planted on the site of a former settlement outpost.