During the pre-dawn operation in Tulkarem refugee camp, Israeli drones struck and killed the head of Hamas's military wing in Tulkarem, Ashraf Nafea, the military said in a statement.
"Ashraf was responsible for manufacturing and embedding explosives intended to attack IDF (Israeli) soldiers," it said.
Hamas confirmed the "cowardly assassination" of commander Ashraf Eid Nafea and his companions.
The head of the camp committee told AFP that Israeli troops killed five people in the operation.
"A mother and her daughter were martyred and three young men were struck by a drone," Faisal Salamah said.
An activist from the camp, who asked not to be identified, confirmed the toll and told AFP the woman and her daughter were volunteers with the ambulance service.
In a separate statement to AFP, an Israeli military spokeswoman said one of the two women killed was an "armed terrorist" who had appeared alongside militant leaders in the town.
The Palestinian Red Crescent said it had treated a 30-year-old man for bullet wounds to the abdomen, thigh and hand, and three women for shrapnel wounds, one of them to the eye.
Palestinian official news agency Wafa said more than 25 military vehicles, including bulldozers, stormed the camp, scooping up rubble to block its alleys.
A woman in the camp told AFP that "streets, shops and houses" were all destroyed in the raid.
"They (the Israeli army) aim at destroying the infrastructure in the camps so they can eventually push people to leave," said the woman, who asked not to be identified for security reasons.
The town of Tulkarem is known as a hub of Palestinian militant activity and is frequently raided by Israeli troops.
In a separate incident near the southern West Bank city of Hebron, Israeli troops killed two people in the town of Sa'ir, the Palestinian health ministry said.
Responding to AFP queries, the Israeli military said its forces carried out an "anti-terrorist operation in the Sa'ir area".
"During the operation, a violent riot broke out in which terrorists hurled stones and blocks toward the soldiers, who responded with fire to remove the threat. Hits were identified," it said.
Since the war in Gaza erupted, violence has soared in the West Bank, with at least 586 Palestinians killed by Israeli settlers or troops, according to the Palestinian authorities.
At least 17 Israelis, including soldiers, have been killed in the territory in attacks involving Palestinians, according to Israeli official figures.
