Eleven Palestinians, including a 16-year-old, were killed and more than 80 wounded by gunfire on Wednesday, the Palestinian health ministry said, when Israeli troops raided the flashpoint West Bank city of Nablus, drawing international appeals for calm.

The death toll was the highest since the second Palestinian intifada, or uprising, ended in 2005.

It was described as a "massacre" by top Palestinian official Hussein Al Sheikh, who called for "international protection for our people".

Prime Minister Benjamin Netanyahu, who heads a new coalition government regarded as the most right-wing in Israel's history, praised Israeli forces and vowed to "hit terrorism hard" after the army said it targeted suspected militants in Nablus.

The United States said it was "extremely concerned by the levels of violence" and called for a de-escalation. UN Middle East envoy Tor Wennesland travelled to the Gaza Strip on Thursday, his spokesman told AFP.

Before dawn on Thursday, Palestinian militants fired rockets from Gaza at Israel and prompting air strikes by the army on multiple sites in the coastal enclave.

Palestinian militant group Islamic Jihad claimed responsibility for the rockets, after saying one of its commanders was killed in the Nablus raid.

The Israeli army said it intercepted five rockets, while a sixth struck an uninhabited area.

Two hours later Israeli air strikes targeted a "weapons factory" and a "military camp" run by Gaza's Islamist rulers Hamas, the army said, sending plumes of black smoke into the sky.

Following the cross-border fire, Netanyahu warned: "whoever tries to attack us will pay the price".

Since December, the premier has led a coalition government alongside extreme-right allies who have been handed key powers in the West Bank.

- 'A real massacre' -

UN chief Antonio Guterres said the "immediate priority must be to prevent further escalation".

"The situation in the occupied Palestinian territory is at its most combustible in years," he said.

The army said Wednesday's raid targeted three suspects implicated in West Bank shootings.

Both sides had "exchanged fire" and rockets were fired on the hideout house by the army, its spokesman Richard Hecht said.

An AFP photographer saw the charred walls of the stone building in the Old City, while rubble was strewn on the floor.

Rocks, explosive devices and Molotov cocktails were hurled at the troops during the raid, the army said, which added that it suffered no casualties.

The Palestinian health ministry said those killed in Nablus were aged between 16 and 72.

Hours after the raid, the ministry announced the death of Anan Ennab, 66, from tear gas inhalation.

He had been in the market when the Israeli incursion began, his brother Allam Ennab said Thursday.

"What happened yesterday in Nablus was a real massacre, like I've never seen before," the 68-year-old told AFP.

Palestinian health officials said 82 people were hospitalised for gunshot wounds. The Palestinian Red Crescent Society said its medics also treated 250 cases of tear gas inhalation.

The wounded include Palestine TV journalist Mohammed Al Khatib, who was shot in the hand, a colleague told AFP.

- Hospital 'covered in blood' -

Talaat Ziada, the head of the intensive care unit in Nablus's Rafidia hospital, said his youngest patient was an 11-year-old boy.

"It was a war zone in the Old City, and it was also a war zone here," he told AFP.

"The corridors and stairs were covered in blood, and people were scrambling to check on their relatives."

Palestinian shops were closed on Thursday in annexed east Jerusalem and elsewhere in the West Bank, including Nablus, after a general strike was called in protest at the violence.

The Lions' Den, a Nablus-based militant group, said six of those killed were members of various Palestinian factions.

The Palestinian health ministry announced Thursday a 30-year-old man died from his wounds, after being shot earlier this month by Israeli forces in Jenin.

Since the start of this year, the Israeli-Palestinian conflict has claimed the lives of 61 Palestinian adults and children, including militants and civilians.

Nine Israeli civilians, including three children, a police officer and one Ukrainian civilian have been killed over the same period, according to an AFP tally based on official sources from both sides.

Israel has occupied the West Bank since the 1967 Six-Day War.

Last year was the deadliest year in the territory since the United Nations started tracking casualties in 2005.

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