Palestinian kills two Israelis in West Bank shooting: army

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Naalwa used a homemade gun, known locally as a "Carlo", according to the army, in what security forces believe was a "lone-wolf attack", meaning he was not part of a militant organisation or acting on its behalf.

Na'alwa was an employee at the factory in Barkan, some seven kilometers west of the settlement city of Ariel in the northern West Bank, where the brutal shooting attack took place.

Eyewitnesses said that inside he tied the hands of his first victim, 28-year-old Kim Levengrond Yehezkel, before fatally shooting her at close range.

Palestinians work side by side with Israelis in the industrial zone.

Security footage shows the shooter fleeing, still armed with a rifle.

Israeli media reported that those killed were found shot to death on their office floor with their hands bound.

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"I am certain that they will apprehend him and I am also certain that we will deal with him to the fullest extent of the law and quickly", Prime Minister Benjamin Netanyahu said at the start of his weekly cabinet meeting in Jerusalem. The Palestinian economy is heavily restricted under Israeli military rule, forcing tens of thousands of Palestinians to seek work in Israel as well as Jewish settlements.

"This was a serious terrorist attack", the military said in a statement.

While insisting the attack was an act of terrorism, he acknowledged there were "other factors involved as well", without elaborating. "Everybody knew him. He went upstairs to the second floor because he knew who he wanted to shoot, and he shot", he said. "I was very surprised by what happened; there was no sign he was planning such a thing", he was quoted by the paper as saying.

Barkan industrial park is next to the settlement of Barkan and was established in the early 1980s.

The Israeli army has launched a manhunt for the attacker.