The dwindling prospects of a U.S.-brokered peace agreement amid the ever-expanding Jewish settlements in the West Bank, occupied by the Israelis since June 1967, is adding to the swelling tension.
Israel's hawkish Prime Minister Binyamin Netanyahu, who despite agreeing to U.S. peacemaking efforts has shown no sign of surrendering the West Bank, has been stoking the unease with hard-line statements that emphasize the government's no-deal stand.
In a forthright Oct. 7 speech at Tel Aviv's Bar-Ilan University, where in 2009 he acknowledged for the first time the two-state solution of an independent Palestinian state existing alongside the Jewish state, Netanyahu was more hawkish than ever.
The daily Haaretz reported Netanyahu "did everything except announce he is reneging on his agreement in principle" regarding the establishment of a Palestinian state.
Netanyahu declared: "Unless the Palestinians recognize the Jewish state and give up the right of return there will be no peace."
He went on say even if the Palestinians did agree to those stern conditions, it won't be enough for Israel.
"After generations of incitement we have no confidence that such recognition will percolate down to the Palestinian people. That is why we need extremely strong security arrangements and to go forward, but not blindly."
The root of the conflict, he declared, was not the occupation, but that the Palestinians do not want the Jews in the land of Israel.
Netanyahu spoke against a steady increase in violence in the West Bank, which the religious settlers claim was promised to the Israelis by God, that included the slaying of two soldiers in September and the savage ax murder of a former Special Forces Col. Shariyah Ofer in his Jordan Valley home.
The Shin Bet security service says terrorists carried out the killings.
With the stabbing of a 9-year-old girl in the Psagot settlement Saturday, The Jerusalem Post said the violence shows "an unmistakable upsurge in Palestinian attacks ... in the West Bank and East Jerusalem," the Arab sector of the holy city captured in the 1967 war.
Shin Bet recorded 129 attacks in September, up from 93 in August.
The Post warned Hamas and Islamic Jihad are trying to build up their terrorist infrastructure to ramp up attacks in the West Bank.
Meantime there have been clashes around the al-Aqsa Mosque, Islam's third holiest shrine, in East Jerusalem and a frequent flashpoint.
Palestinian militants called for an uprising because Jewish groups escorted by police visited the site. Jews revere the site as the location of their biblical temples.
Palestinian frustration at the government's failure to curb settlement expansion and the increasingly strident statements from Netanyahu and his rightwing allies is fueled by nearly three years of regionwide uprisings against Arab dictators.
Israelis, too, are increasingly anxious as they see their international isolation growing amid the regional turmoil, expanding terrorism in Sinai, the Syrian war and U.S. moves exploring a rapprochement with Iran, which Netanyahu sees as an existential threat to Israel.
This has produced a highly charged climate of mutual apprehension.
There have been two uprisings against the 46-year-old occupation of the Palestinian territories. Gaza has been under Palestinian control since June 2005.
Neither intifada, the first in 1987-93, and second in 2000-05, succeeded in ending the occupation although the first helped precipitate the 1993 Oslo Accords.
But the peace process essentially ground to a standstill in 2000, when the Camp David summit failed and the second intifada, far bloodier than the first, erupted with a pulverizing campaign of suicide bombings against Israeli cities.
Most analysts don't believe a new uprising will be any more successful than its predecessors.
But the Palestinians increasingly have less and less to lose. The settler population swelled to 342,000 in 2012, a growth rate three times greater than the national rate of 1.9 percent.
Israel has sole control over 61 percent of the West Bank, where the Palestinians want to establish a state. That area contains most of the territory's natural resources.