BEIT FURIK : Hundreds of Israeli troops were searching the West Bank Friday for the suspected Palestinian killers of a Jewish settler couple shot in their car before their young children's eyes, the army said.

Rabbi Eitam Henkin and his wife, Naama, both in their 30s, were shot as they were travelling in their car Thursday night between the settlements of Itamar and Elon More, in the north of the Israeli-occupied territory.

Their four children, aged between four months and nine years, were found unharmed in the back of the vehicle. Army spokesman Colonel Peter Lerner said the Henkin couple was "massacred right in front of" them. A paramedic described the scene of the shooting as "difficult". "We saw a car in the middle of the road, and next to it, a man in his 30s lay on the ground with upper body gunshot wounds," Boaz Malka was quoted as saying by Israeli media. Israel's foreign ministry said "at least two" gunmen targeted the vehicle in a "drive-by" attack, but the exact circumstances of the incident were unclear.

Israeli forces were conducting an "intensive search" on the ground, said army spokesman Arye Shalicar. And an AFP journalist saw soldiers searching cars along roads around the attack site.

The Henkins were residents of the Neria settlement, northwest of Ramallah. The foreign ministry said they were returning from a graduation ceremony at a Jewish school when the shooting occurred around 9 pm.

The incident came hours after Prime Minister Benjamin Netanyahu's address to the UN General Assembly, and a day after Palestinian president Mahmud Abbas said Israel's refusal to release prisoners and stop settlement activity was hampering fresh peace talks.

Netanyahu condemned the killings, which he called "the effects of Palestinian incitement," vowing that security services would work to "capture the murderers and improve security for all Israeli citizens".

The European Union called for justice as well as restraint.

"Even in the face of such a crime, restraint and calm are needed on all sides to ensure that the violence witnessed yesterday and in recent months does not aggravate the situation further," it said.

Apprehensive of rising tensions between settlers and Palestinians, the army said it would be deploying "four battalions in order to prevent an escalation of violence in the area adjacent to the location of the attack."

In the Palestinian village of Beitillu, a short distance from Neria, assailants torched a car and spray-painted "Revenge Henkin" in Hebrew on a nearby wall, the army said, adding that nobody was hurt.

The Henkins were buried Friday in Jerusalem's Har Hamenuhot cemetery at a ceremony attended by thousands of mourners, including their oldest child Matan, and Israeli President Reuven Rivlin. "We will fight terror without fear, mercy or cowardice," Rivlin told the crowd.

Tensions have been running high between Israeli police and Palestinians at the Al-Aqsa mosque compound in Jerusalem.

The site of Thursday's shooting was near the Palestinian village of Beit Furik, where a Palestinian was killed by Israeli forces during clashes last month.

Israeli Defence Minister Moshe Yaalon, who visited the site Friday, said the security forces had been deployed "to place our hands on the murderers".

The circumstances surrounding the killing remain unclear. A group purportedly linked to the Palestinian Fatah movement claimed responsibility, but this could not be immediately verified.

The militant Hamas group for its part hailed those behind the shooting, while not taking responsibility for it. "This operation was in response to the crimes of the Zionists," it said.

Israel occupied the West Bank in the 1967 Six-Day War in a move never recognised by the international community.

The last killing of an Israeli in the West Bank happened on June 29, when a settler died and three others in a car with him were wounded.

On July 31, suspected Jewish extremists firebombed a Palestinian home in the village of Duma that killed toddler Ali Saad Dawabsha and fatally wounded his parents.