Defense Minister Ehud Barak vowed on Tuesday that Israel would "exact a price" from those who shot dead four Israeli civilians in the West Bank.
"This is an apparent attempt by lowly terrorists to sabotage the attempt to achieve a diplomatic process and to try to hurt the chances of the talks opening in Washington," Barak said in a statement.
Barak was briefed on the incident by IDF Chief of Staff Gabi Ashkenazi and Shin Bet Chief Yuval Diskin, and then informed Prime MInister Benjamin Netanyahu, who is en route to Washington, of the attack.
Settler leaders and rightist Knesset members earlier Tuesday condemned the shooting attack, with some calling for Netanyahu to freeze peace talks with the Palestinians and focus instead on the security of Israel's citizens.
"Now it is clear that the most violent periods take place when there is a political process," said MK Uri Ariel (National Union). "Netanyahu must freeze talks and focus on ensuring peace for Israel's citizens."
MK Aryeh Eldad (National Union) said that the attack raises concern about whether Palestinian President Mahmoud Abbas and Palestinian security services can control militants in the West Bank.
"This organization is not equipped to effectively battle Hamas and we will not be surprised if their weapons are turned against us," said Eldad.
Tzviki Bar Hai, the regional council head in Kiryat Arba, said the incident "provides food for thought about the will of our neighbors to co-exist. Every time we start talking, they respond with war."
Education Minister Gideon Saar, a close ally of Netanyahu, said it was a shocking incident but should not halt diplomacy.
"It is very regrettable, how not for the first time, against the background of diplomatic talks aiming to advance peace, the nearly automatic response of Palestinians was a terrorist attack on civilians," Saar said.
Saar, interviewed by Israel's Channel 10 television said, he thought "no prize should go to the murderers by not holding diplomatic talks."
U.S.: Attack is a tragedy
The U.S. State Department, stopped short of condemning the attack, but called it a tragedy.
"We dont know enough about the circumstances and we are well aware that there might be external events that might have an impact on the environment and actors in the region that might try to sabotage the process," said State Department spokesman Philip J. Crowley. "But we believe that we have a window of opportunity and what is needed now is political will and creativity on the part of the leaders."