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Two Palestinians infiltrated the West Bank settlement of Itamar on Friday night, stabbing to death five members of one family before fleeing.

The dead are Udi Fogel, 36, his wife Ruthie, 35, and their children, Yoav, 11, Elad, 4, and Hadas, 3 months old. The family's three other children were not injured.

The Israel Defense Forces and the Shin Bet security service arrested about 20 residents of villages around Itamar on suspicion of involvement in the murder, Palestinian sources said yesterday. Some of the arrests were made in the village of Awarta.

The IDF has increased its presence in the northern West Bank with a battalion from the Nahal Brigade and Border Police companies, fearing an escalation after Friday night's attack.

A senior IDF officer said last night that the murder and subsequent violent responses by settlers could lead to "ongoing escalation" in the West Bank. But he added that the Palestinian Authority wants to prevent the outbreak of a third intifada. He said that in recent weeks there had been an increase of incidents between settlers and Palestinians near West Bank settlements.

An initial probe into Friday's attack shows serious failures in the functioning of the security forces at Itamar. (See Page 2. ) Pursuit of the terrorists also began very late.

The two terrorists entered Itamar, east of Nablus, just after 9 P.M. on Friday. An alarm went off in the settlement's security headquarters and a civilian security official was sent to the site, but saw nothing untoward. According to procedures, the IDF is to be informed of any alarm, but this was not done.

The terrorists apparently knew that the family was still awake, so they waited for an hour near the house, entering it at around 10:30 P.M. Apparently they went to the boys' room first and stabbed them. Then, after killing the mother, they moved to the parents' bedroom and murdered the father and 3-month-old Hadas.

Two other boys, 8-year-old Ro'i and 2-year-old Yishai, were asleep in another room. The terrorists did not enter that room. They left the house at around 11 P.M. They then managed to leave the settlement without being detected.

The eldest of the Fogel children, 12-year-old Tamar, returned home from a youth group activity at around midnight. When no one answered her knock, she called a neighbor who helped her open the door, at which point they saw the bodies.

The family, which had lived in Netzarim in the Gaza Strip until the 2005 disengagement, moved to Ariel and recently to their new home in Itamar.

The IDF was first called in more than three hours after the Palestinians first entered the settlement. A Magen David Adom ambulance crew pronounced four of the victims dead, and tried to resuscitate the baby, who still had a pulse, but she died a few minutes later.

The forces began searching the settlement, and residents were ordered to remain in their homes. Only later was it realized that the terrorists had fled long before.

The settlement's rabbi ordered that the five bodies remain in the house until the Sabbath ended.

The three surviving children were taken to the home of their grandparents, Udi Fogel's parents, at the settlement of Neveh Tzuf.

Considering the time that had elapsed after the terrorists fled the settlement, the IDF soon widened the scope of its search from around Itamar to the rest of the Nablus area, setting up checkpoints. They blocked the entrance to Nablus and the surrounding towns.

IDF Chief of Staff Benny Gantz and GOC Northern Command Avi Mizrahi came to Itamar, saw the Fogel family home and met with residents. They then went to brigade headquarters, a few minutes from Itamar, for a briefing and evaluation with other senior officers.

By dawn, the IDF had reestablished the checkpoint at Hawara, which they evacuated a few weeks ago, and special forces and drones joined the search.

"This is a crime committed by animals," Gantz said after the evaluation. "We are continuously evaluating the situation and are in the midst of an intelligence-based and operational search. We will not rest until we catch the murderers."

After the Sabbath ended, reports came in of stone-throwing between settlers and Palestinians near the village of Asira al-Qibilya near Itamar and near Havat Maon in the southern Hebron Hills. Settlers also blocked roads in the West Bank.