Israeli forces raided the Qalandia refugee camp, located between occupied East Jerusalem and Ramallah, early on Sunday.
After the raid, clashes broke out between the Israeli soldiers and the Palestinian residents, local media reported.
The clashes lead to the injury of at least three locals by live ammunition and several others were arrested.
However, soldiers were then forced to withdraw from the camp due to heavy clashes with the residents, who prevented them from further demolishing homes of Palesitnians who allegedly attacked Israelis earlier this month.
An army spokesperson stated that they were "still looking into" the incident.
On the same day in Nablus, the Israeli Army had to pull out settlers after they clashed with local Palestinian residents near the holy site of Joseph's Tomb.
Frustration has increased as Israel continues to construct Jewish-only settlements throughout the West Bank in defiance of international law.
In addition, tensions over the Al-Aqsa Mosque compound have also sparked weeks of protests across the occupied West Bank, including in East Jerusalem, and the Gaza Strip.
Israeli authorities have responded with a harsh crackdown on protesters using tear gas, stun grenades, rubber-coated steel bullets and live ammunition.
Since October 1, at least 43 Palestinians - including alleged attackers, unarmed protesters and bystanders - have been killed by either Israeli authorities or settlers.
Seven Israelis have also been killed in attacks this month.
Last week Israeli ministers approved a list of “security measures,” which included home demolitions, revoking residency rights, increasing the deployment of military forces and enabling Israeli police to seal off Palestinian residential areas in occupied East Jerusalem.
Israeli Prime Minister Benjamin Netanyahu pushed for the demolitions and other measures as a punitive move against the families of the suspected Palestinian attackers.
The move went forward despite warnings by rights groups that such practices are illegal.
A Ramallah-based human rights group, Al Haq, argued that the increase in punitive home demolitions is "a sort of collective punishment which, according to the Fourth Geneva Convention is strictly forbidden."
The mayor of Jerusalem, Nir Barkat, along with several other Israeli leaders have encouraged Israeli citizens to keep guns in their possession at all times.
And last month the Israeli government eased live fire regulations against Palestinian protesters.
Israeli Justice Minister Ayelet Shaked, a member of the ultra-nationalist Jewish Home party, had announced last week that the government will also start to revoke social security and residency rights of the alleged Palestinian attackers and their relatives in Jerusalem, leaving them with neither Israeli nor Palestinian citizenship.
According to Rima Awwad, a member of the Coalition for Jerusalem - a Palestinian rights group - said the crackdown "shows the level of desperation."
"Israeli leaders are trying to appease the Israeli public by inciting against Palestinians, but it will only add to the frustrations of Palestinians living in Jerusalem," she told Al Jazeera.