The IDF confirmed that their forces shot at gunmen in the city, resulting in at least one definite hit.
The Palestinians identified the two fatalities as Mohaned Maraish and Alleh al-Raliz. The two were exchanging fire with IDF infantry forces operating in the old city, the sources said.
The IDF reported that the two were responsible for shooting attacks and for hurling explosive devices at Israeli forces in the area.
Army officials made it clear that the operational activity against wanted Palestinians in the West Bank was continuing as usual, in spite of the tight security placed on right wing activists who arrived at the former settlement of Homesh on Monday.
7 wanted Palestinians arrested overnight
On Monday night, Palestinians hurled four explosive devices and opened fire at an IDF force operating in Jenin and at a force operating in the village of Qabatiya, south of Jenin. There were no reports of injuries among the soldiers, who fired back at the gunmen.
IDF forces arrested seven wanted Palestinian suspects in the West Bank overnight. The detainees were taken in for questioning by security forces.
Earlier this month, IDF forces deployed in Nablus to locate wanted Palestinian operatives and uncover weapons' stores. During the operation, the IDF detained 11 operatives, and uncovered several weapons' caches and bomb-making labs.
Forces also discovered a room containing videos of suicide bombers taped prior to leaving for 'missions'. One Palestinian was killed and four IDF soldiers were injured during the operation.
IDF sources labeled the operation as a success, but Palestinian sources claimed that the 11 arrested men were not terror suspects.
A senior al-Aqsa official told Ynet at the time that the operation was a complete failure, as "all of al-Aqsa's men and those of the other organizations were completely unharmed and were not detained."
He added that stories of weapons' caches and labs were invented to bolster public opinion of the operation.
Ali Waked contributed to the report