The attack took place late on Thursday when gunmen opened fire at a vehicle travelling near the Palestinian village of Beit Furik. The shots killed Eitam and Naama Henkin, residents of the Jewish West Bank settlement of Neria.
Their four young children, including a four-month-old infant, were in the back seat of the car, but were unharmed.
Defence minister Moshe Yaalon visited the site, pledging to catch the perpetrators and, like other Israeli politicians, blamed Palestinian president Mahmoud Abbas for inciting such violence.
Thousands attended the parents’ funeral in Jerusalem, including Israeli president Reuven Rivlin.
“We cannot stand silently when the hands of murderers steal a loving mother and father away from their children,” Rivilin said in a eulogy for the couple. “We are facing a brutal terrorist onslaught.”
The attack comes on the heels of a series of Palestinian rock and firebomb attacks that have prompted Israel to vow to quash such threats.
It also followed a hard-line speech at the UN by Abbas, the last of several that Israeli leaders have condemned as incitement.
Abbas has said that Israelis have desecrated a Jerusalem holy site with their “dirty feet” and charged that Israel was committed to the “ethnic cleansing” of his people.
Speaking before the UN General Assembly, Abbas said Israel had repeatedly violated its commitments, most notably by expanding settlements in the West Bank and east Jerusalem, on lands the Palestinians seek for a future state, and accused Israel of waging “a new war of genocide... against the Palestinian people”.
“A people whose leader encourages murder will never have a state and this must be stated clearly,” said cabinet minister Naftali Bennett, head of the pro-settler Jewish Home party.
Settler leaders said that they planned to stage a protest in front of the office of prime minister Benjamin Netanyahu — who is in New York after addressing the UN — to demand tougher action to defend the settlers from militants.
Gaza’s Islamic militant Hamas rulers welcomed Thursday’s attack but stopped short of claiming responsibility for it.
Abbas’ Palestinian Authority did not comment on the attack.
Tensions have continued to flare between Israelis and Palestinians over the Jerusalem site known to Jews as the Temple Mount, home to the biblical Temples, and to Muslims as the Noble Sanctuary, site of the Al-Aqsa mosque and the spot from where the prophet Mohammad is said to have ascended to heaven.