Security officials said the head of the Islamic Jihad in the city opened fire at the officers, hitting one in the shoulder and lightly wounding him. The officers returned fire, killing the three men.
Palestinian reports said the men were sitting in a car when a black vehicle passed and lethal gunshots were fired. They claimed that one of those killed in the incident was a civilian who was driving the Islamic Jihad members.
IDF back in Nablus
According to security officials, the men were members of an Islamic Jihad cell that tried to carry out a suicide bombing attack in central Israel last week. The attack was thwarted when Israeli security forces caught a would-be bomber in a Bat Yam apartment.
A senior official from the Islamic Jihad's military wing, al-Quds Brigades, told Ynet that his organization would avenge the killing very soon and that "the response will be hard and painful."
He said his organization had proven its abilities in the past and that the Israelis would witness them again in the coming days.
Hundreds of Palestinians met near the hospital in Jenin and Saadi's home and fired shots in the air calling for quick revenge.
Last Wednesday a senior Islamic Jihad member believed to be behind the foiled suicide terror attack in Tel Aviv was killed by disguised Border Guard officers and Shin Bet operatives in Jenin.
Mahmoud Abu Abid was shot at close range after the security establishment received intelligence information on his whereabouts. No injuries were reported among the soldiers.
Earlier on Wednesday Palestinian sources reported that IDF forces returned to Nablus after withdrawing from the West Bank town on Tuesday.
The IDF said the activity there, in which forces are operating against terror infrastructure, is not limited in time and scope.
Ali Waked contributed to the report