Israeli Prime Minister Benjamin Netanyahu has promised to respond with a “heavy hand” to the killing of four rabbis and the wounding of eight others in a Tuesday morning attack on a synagogue.

The attack by two men, armed with a gun, axes and knives, took place in an ultra-orthodox neighbourhood of West Jerusalem. Israeli police shot and killed the attackers at the scene.

The Popular Front for the Liberation of Palestine said that its members, identified by police as cousins Ghassan Abu Jamal and Uday Abu Jamal, had carried out the attack, calling it a “heroic operation” and a “natural response to the crimes of the occupation.”

Hamas and Islamic Jihad praised the attack, saying it was in response to the death of Yusuf Ramouni, a bus driver from East Jerusalem who was found hanged inside his vehicle on Sunday. While the police claimed Ramouni’s death a suicide, Palestinians said he had been beaten and murdered.

In contrast, Palestinian Authority President Mahmoud Abbas issued a statement “condemning the killing of worshippers in a house of God in West Jerusalem.” He called for a halt to Israeli “raids into al-Aqsa” and “provocations” by Israeli settlers on Palestinian lands.

Israel’s police chief, Yohanan Danino, raised the alert level in Jerusalem to the second highest and ordered police nationally to prepare for any possible scenario. Security forces stormed the Jabal al-Mukaber neighbourhood in large numbers while police arrested a number of the attackers’ relatives. Internal Security Minister Yitzhak Aharonovitch said he would seek some easing of gun control rules so that military officers and security guards could carry weapons while off-duty. Right-wing Israeli protests have taken place throughout the city.

Netanyahu ordered the demolition of the homes of the attackers’ families in East Jerusalem. He accused Hamas, the Islamist group that controls Gaza, and Palestinian Authority President Mahmoud Abbas of inciting violence. The prime minister’s spokesperson Mark Regev went further, equating Hamas with the Islamic State in Iraq and Syria, which controls large swathes of Iraq and Syria.

With Israel having already waged a bloody war against Gaza in July that led to 2,200 deaths, overwhelmingly Palestinians, Washington is clearly concerned at Netanyahu risking an escalation of a situation already teetering on the brink of what many are terming a third Palestinian Intifada. The US is particularly worried by Netanyahu’s targeting of Abbas, a key US asset.

President Barack Obama issued a statement condemning the attack, while declaring: “At this sensitive moment in Jerusalem, it is all the more important for Israeli and Palestinian leaders and ordinary citizens to work cooperatively together to lower tensions, reject violence, and seek a path forward towards peace.”

Shin Bet (internal security) chief Yoram Cohen publicly rejected claims that Abbas encouraged terrorism, saying, “Abu Mazen [Abbas] is not interested in terror and is not leading his people to terror.”

The attack and Israel’s response portend a wider conflict between Israel and the Palestinians in the Occupied Territories and within the Palestinian-dominated towns and cities of Israel itself that could embroil neighbouring Jordan. It follows mounting provocations by the Israeli authorities in support of nationalist religious zealots who, along with ultra-right politicians of the Jewish Home Party in Netanyahu’s ruling coalition, have called for an end to rules banning Jews from praying at the site of al-Aqsa Mosque and the Dome of the Rock on Haram al-Sharif, known as Temple Mount to the Jews, and full Israeli sovereignty over the site.

Haram al-Sharif/Temple Mount was the site of the Jewish temple destroyed 2,000 years ago, of which all that remains is the Wailing Wall. But Haram al-Sharif is one of the three most important sites in Islam.

Israel seized the Al-Aqsa site along with the rest of East Jerusalem in the 1967 Arab-Israeli war. Israel annexed East Jerusalem in defiance of international law.

According to Muslim belief, the Prophet Mohammed rose to heaven from the Dome of the Rock. Jordan’s King Abdullah II, who claims descent from the Prophet, is guardian of the city’s Islamic holy places by tradition and by the 1994 peace treaty with Israel. Any challenge to the religious status quo would also challenge his legitimacy in Jordan and throughout the Arab world.

Whereas just a decade ago a few hundred religious Jews visited the site, some 8,500 visited it last year. In the last few weeks, hundreds of Jews and several politicians have marched onto the Mount, including prominent members of the ruling Likud party and Jerusalem’s mayor, Nir Barkat, escorted by armed police.

This has given rise to repeated clashes between Israeli riot police and Palestinian youth at the compound, culminating on October 29 when a Palestinian assailant shot and wounded Yehuda Glick, a prominent messianic activist and nationalist provocateur. Israel then closed the compound to Muslim worshippers.

Since then, visits by Jewish Israelis to the Haram al-Sharif/Temple Mount have increased. Palestinians from the West Bank and Gaza are refused access.

As tensions have mounted, five Israelis and a foreign national visiting Jerusalem have been run over deliberately or stabbed by Palestinians, while the security forces have killed a dozen Palestinians.

Jordan also fears that right-wing Israeli elements will force the annexation of Area C in the West Bank, triggering a third flight of Palestinians to Jordan, politically destabilising the country, where Palestinians already form a majority.

Jordan’s Abdullah has made clear that any unilateral Israeli move on the al-Aqsa compound would force a review of the 1994 peace treaty. On November 5, he withdrew Jordan’s ambassador to Israel.

With friction between two of Washington’s most important regional allies cutting across its plans for military escalation in Iraq and Syria, US Secretary of State John Kerry flew to Amman to try and persuade Abdullah and Netanyahu to calm the tensions.

Netanyahu publicly proclaimed his adherence to the status quo, but at the same time made it easier to sentence young Palestinians who throw stones at Israeli security forces to up to 20 years in prison. Some 800 young Palestinians have been locked up in the past two months.

Netanyahu also approved new housing for Jews in Jerusalem, including 500 units to expand an existing Jewish enclave north of the city, Ramat Shlomo, and 2,600 units at Givat Hamatos, a hill in southern Jerusalem that links two other neighbourhoods lying outside Israel’s pre-1967 borders. The construction will encircle the Palestinian village of Beit Safafa, which is also being bisected by a highway linking Jewish settlements to the city centre.

All this comes as Palestinian homes in East Jerusalem are being demolished, ostensibly because they have been built or extended without permission, which is, in practice, impossible to obtain. According to the United Nations, 298 Palestinians were evicted and their homes demolished in 2013 and well over 100 this year.

There have been riots and clashes between Palestinian Israelis and Israeli police in the northern towns following the brutal killing by police of 22-year-old Kheir Hamdan in Kafr Kana, near Nazareth. Netanyahu and Economics Minister Naftali Bennett both suggested Hamdan was a “terrorist.” Netanyahu called on the interior minister to investigate stripping the Palestinian Israeli protesters in Kafr Kana and elsewhere of their citizenship and their right to live in Israel. He told them to “move to the Palestinian Authority or to Gaza… Israel will not put any obstacles in your way.”