The Israel Defense Forces imposed a wide-ranging closure on the West Bank city of Hebron and its environs on Friday, following a sudden upsurge in terror attacks.
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Some 700,000 people will be affected by the closure, which is the largest imposed since the kidnapping and murder of three Jewish youths in the West Bank in 2014.
The spate of terror attacks will also be discussed by the security cabinet in an emergency meeting on Saturday night.
Two Israelis have been killed and six wounded in four terror attacks since Thursday. Two Palestinian assailants have also died.
In an initial response to the attacks, the Prime Minister's Office announced on Friday that Israel will immediately deduct the amount of money paid monthly by the Palestinian Authority to terrorists and their families from tax proceeds it collects on behalf of the Palestinians.
The amount deducted is likely to amount of tens of millions shekels a month.
"The authority transfers the money to terrorists through various laundering methods and as the terror worsens, the more money is paid," the office said.
"Israel believes that the authority's support of terror, both in terms of incitement and in payments to terrorists and their families, are an inducement to terror."
Transport Minister Israel Katz called on Prime Minister Benjamin Netanyahu on Friday to take additional steps against what he said was increasing Palestinian terror.
"We need to understand that we are in an all-out war and act accordingly," Katz said in a statement. "We should declare a state of emergency, pass legislation that would enable the expulsion of the families of terrorists and take severe steps against inciters and those who support terror and cover it up."
Education Minister Naftali Bennett told Haaretz that he had asked the prime minister to immediately convene the security cabinet on Thursday, following the terror attack in Kiryat Arba in which a 13-year-old Jewish girl was stabbed to death in her bed.
Terror attacks are inspired by previous attacks and it is therefore necessary to react immediately and forcefully, Bennett said.
The minister added that he intends raising a number of proposals at Saturday's emergency meeting, including:
The construction of new residential and industrial areas in Kiryat Arba, plans for which have already been approved;
The arrest of the mother and sister of the Palestinian who carried out the Kiryat Arba attack, their trial and expulsion to another area in the West Bank, due to their praise of the terrorist, who was killed during the attack;
The demolition of all illegal Palestinian structures that have been approved for demolition but which have not yet been demolished for political reasons;
The imposition of a closure on the killer's village until further notice.
Cutting off internet and cellular access in the Hebron area to prevent the dissemination of messages and incitement.