Israeli police seal off several Palestinian villages near the settlement of Ariel as they track down shooter.

Two Israelis have been killed and a third wounded in an industrial area near the illegal settlement of Ariel in the occupied West Bank, Israeli police said.

Local media reported on Sunday that the shooter, identified by police as a 23-year-old Palestinian man from Shuwaikah – a town in northern Tulkerem in the West Bank – was an employee at a factory in the Barkan industrial zone, where the incident took place.

Those killed were identified as a man and woman, both in their 30s and employees at the same factory.

According to local media, a third woman, 54, was injured and transferred to a hospital.

Israeli Defence Minister Avigdor Lieberman said the Israeli army and police are searching for the shooter.

Barkan is one of two adjacent industrial zones. It houses more than 130 factories and companies that have been built on confiscated Palestinian land.

According to Palestinian news agency WAFA, the Israeli forces closed the entrances to at least four nearby Palestinian villages that lie in the West Bank district of Salfit.

The Palestinian Islamic Jihad group called the attack a “natural response” to Israeli crimes in the besieged Gaza Strip, Jerusalem and Khan al-Ahmar – a Bedouin village in the West Bank slated for demolition.