The horrific act perpetrated in Itamar late Friday night turns the clock back to a darker time in the West Bank. The two Palestinian terrorists who murdered five family members - a father, mother and their three children - provided a jolt whose impact is likely to be far-reaching. Its consequences will cast a pall over Israelis' and Palestinians' sense of security in the northern West Bank, the intelligence cooperation between Israel and the Palestinian security services, and perhaps the lofty goal of restarting the diplomatic process.

In recent weeks, aides to Benjamin Netanyahu have hinted about the "Bar-Ilan 2" speech the prime minister intends to give in April or May outlining a new diplomatic initiative.

The murder in Itamar places a huge question mark over the planned speech, particularly if it ignites a new wave of violence between Arabs and Jews.

Now the rightist flank of Netanyahu's coalition will apply pressure on the premier to take a more hard-line stance against the Palestinian Authority. Talk of peace will certainly not be on the agenda, at least in the short term.

Since it is still difficult to blame the PA for not doing enough to thwart terrorism (its campaign against Hamas continues unabated ), Netanyahu emphasized the anti-settler incitement in the Palestinian media and educational system in his remarks. The PA security apparatus has recently undertaken many successful operations that have saved Israeli lives, including extricating Israelis who mistakenly ended up in the heart of Palestinian towns and the arrest of would-be terrorists seeking to kidnap and murder settlers.

The slayings in Itamar put the PA in a highly embarrassing situation. While Palestinian leaders are working to rebrand their struggle - in the spirit of Tahrir Square - as a largely nonviolent movement of David versus the Israeli Goliath, the massacre of children and their parents asleep in their beds reflects an entirely different picture.

In contrast, Hamas spokespeople in Gaza praised the massacre. In the southern part of the Strip, Hamas officials handed out candy to residents in celebration.

At this stage, the attack appears to be an initiative undertaken by local agents rather than an operation ordered and directed from either Damascus or Gaza City. Intelligence agents have a hard time pinpointing and thwarting "grassroots terrorist attacks" of this kind, whose details are only known by the perpetrators. Despite the close security coordination with the PA, Israel views the hunt for the killers as exclusively its task.

The Shin Bet security service and the Israel Defense Forces are capable enough of following leads and showing quick results that will help calm tensions. Reports that responsibility for the attack was claimed yesterday by the "Al Aqsa Martyrs' Brigades - Imad Mughniyeh Group are "nonsense," according to a senior officer in the area.

The attack's immediate ramifications will be felt on the ground. The West Bank already faced similar dangers of escalation last August, when four residents of the settlement of Beit Hagai near Hebron were murdered in a drive-by shooting by Hamas. At the time, considerable efforts were made, including by the settler leadership, to prevent the situation from escalating into mutual acts of revenge.

This time, the danger is much greater. The murderers struck at the heart of the constellation of settlements in the northern West Bank - the most ideologically committed areas in the eyes of the settlers. The photographs of blood strewn across the children's bedrooms will have a powerful sentimental effect. The response could exceed the usual "price tag" acts, which feature rioting in Palestinian villages and vandalism. It could deteriorate into terrorism by Jewish extremists.