Two women killed when their car was shot at and rammed in the West Bank were British-Israeli nationals.
The women were sisters – one aged 15 and the other in her 20s, local media reported.
Their mother was seriously injured in the attack near the Hamra settlement, about 30 miles north of Jerusalem.
Friday’s shooting happened after Israeli war planes hit Lebanon and Gaza in response to rocket attacks Israel blamed on militant group Hamas.
Seven people were also wounded on Friday night on Tel Aviv promenade in what the ambulance service called a “suspected terror attack”.
Two of the victims sustained serious injuries, said Israel’s foreign ministry, but further details are not yet available.
Tensions are high in the region following police raids on Al Aqsa Mosque in Jerusalem this week.
Sky News Middle East correspondent Ali Bunkall said it’s believed the victims of the car attack moved to Israel around 2005.
The sisters’ mother was airlifted to hospital in a “very critical condition”, he added.
Pictures from the scene show several cars badly damaged on the side of the road.
Their father was behind in another car when the attack happened, according to Oded Revivi, the mayor of a settlement near Bethlehem where the family lived.
Sky’s correspondent said the targeting of cars with Israeli number plates in the West Bank had become “far more commonplace in the last few weeks”.
Israeli Prime Minister Benjamin Netanyahu and defence Minister Yoav Gallant visited the site of the shooting late on Friday.
“It’s just a matter of time, and not much time, until we settle the score,” Mr Netanyahu said.
Road blocks have been set up to try to find the attackers.
No group has claimed responsibility but a Hamas spokesman hailed it as “retaliation for the crimes committed by Israel in the West Bank and the Al Aqsa mosque”.
A UK Foreign Office spokesperson said in a statement: “We are saddened to hear about the deaths of two British-Israeli citizens and the serious injuries sustained by a third individual.
“The UK calls for all parties across the region to de-escalate tensions.”
The clashes at Jerusalem’s Al Aqsa compound came at the start of the Jewish festival of Passover, which this year crosses over with Ramadan.
The site is extremely sacred to both Muslims and Jews and tensions over access and control often spill over into violence.
Read more:
Why is there tension over Jerusalem holy site?
Israel’s Friday morning airstrikes hit different areas of Gaza, including tunnels and weapons-making sites of Hamas – the group that controls the blockaded coastal strip.
Hamas targets in southern Lebanon were also attacked, according to Israel’s military.
There were no reports of serious injuries following the Israeli strikes, but the Palestinian Health Ministry said a children’s hospital in Gaza had been damaged.
Israel said its retaliation followed 34 rockets fired from Lebanon on Thursday – one of the heaviest such attacks since its 2006 war with Hezbollah.
Authorities said 25 of the rockets fired at Israel were intercepted by air defences.
Most of those that made it into Israeli territory hit open areas, but a house was hit by shrapnel when one landed in the town of Sderot.