Police said a man broke into the house in Itamar and stabbed a husband and wife and three of their children aged 11, 3 and a 3-month-old, Haaretz reported.
Two other children in the house, 2 and 4, were uninjured, police said.
The slayings were discovered by the couple's 12-year-old daughter when she returned home around midnight, the report said.
The incident in the disputed territory sparked immediate outrage in Jerusalem, with Prime Minister Binyamin Netanyahu demanding the Palestinian Authority assist in the investigation, the Jerusalem Post said.
Foreign Minister Avigdor Lieberman ordered the country's United Nations delegation to file a formal complaint with the Security Council, Haaretz said.
"The fact that the Palestinian Authority has not yet announced a denunciation of this horrific attack is the ultimate proof of the true nature and character of they who are supposed to be our negotiating partner," Lieberman said.
Neither report indicated why Israel presumed the killer was Palestinian.
Notable deaths of 2014 [PHOTOS]