Republican presidential candidate Mitt Romney's remarks have raised international concerns that, if elected, he would bring fresh instability to the world stage.
The attack ends a period of calm that has prevailed since March and comes on the heels of Israel's return of the remains of 91 Palestinian militants.
The Palestinian Authority of Mahmoud Abbas is growing increasingly intolerant of criticism. Last week the PA blocked eight websites tied to an Abbas rival.
The decision, which is part of a broader settlement expansion, could pave the way for similar legalizations. Prospects for meaningful peace talks just grew dimmer.
Palestinians originally hoped that Marwan Barghouti, compared by some to former South African prisoner-turned-president Nelson Mandela, would be included in a prisoner swap finalized today.
Israel-Gaza violence has flared up again, with Israel killing two militants suspected of plotting attacks along the Israel-Egypt border.