Israel's far-right finance minister, Bezalel Smotrich, has called for the dissolution of the Palestinian Authority in the wake of Monday's shooting in Jerusalem.
"The Palestinian Authority must disappear from the map, and the villages from which the terrorists came should look like Rafah and Beit Hanoun," the pro-settler extremist wrote on social media on Monday.
He was referring to two cities in Gaza that the Israeli military has razed to the ground.
Smotrich's statement came after two gunmen fired on people at a bus stop in East Jerusalem, killing six and wounding eight others.
Hamas's armed wing claimed responsibility for the attack.
Prime Minister Benjamin Netanyahu said Israeli forces were encircling Palestinian villages in the occupied West Bank.
"We will apprehend whoever aided and dispatched them, and we will take even stronger steps," he said.
Israel's defence minister, Israel Katz, on Tuesday announced what he called "civilian sanctions", declaring that all "illegal structures" in the villages would be destroyed and work and entry permits for 750 would be revoked.
It is unclear how many buildings the military plans to destroy.
Smotrich's comments come just days after he announced plans to annexe more than 80% of the West Bank in response to plans by a number of Western countries to recognise a Palestinian state.
Several key Israeli allies – including France, the UK, Canada and Australia – are expected to formally recognise Palestinian sovereignty during the UN General Assembly later this month.
The minister also recently approved the illegal construction of the E1 settlement outside East Jerusalem, which he said would "erase" the idea of a Palestinian state.
The project would connect East Jersualem to the Israeli settlement of Ma'ale Adumim, blocking a Palestinian state from being established on contiguous territory.
Plans for the settlement were frozen for years due to pushback from Israel's Western allies.