Thousands gathered at midnight on Monday in the settlement of Gush Etzion to bid farewell to an Israeli citizen who was murdered in first fatal attack of the New Year.

Prime Minister Benjamin Netanyahu was among those paying tribute to 45-year-old Ari Fuld, an American-born resident of Efrat, visiting his family before Sunday’s funeral. “I embraced them in the name of the entire nation in this time of terrible grief,” he said afterwards. “We are alive thanks to heroes like Ari. We will remember him forever.”

Ari Fuld was stabbed in a supermarket car park at Gush Etzion junction, south of Jerusalem, by 17-year-old Khalil Jabarin, who lives in the village of Yatta near Hebron.

Mr Fuld managed to draw his handgun and wound his assailant before collapsing. An ambulance rushed him to Shaarei Tzedek hospital in Jerusalem, where he died shortly after.

A business consultant and father of four who had emigrated to Israel in his late teens, he was well known as a passionate activist in right-wing politics.

His stabbing is not seen by Israeli defence experts as the start of a new trend of violence in the West Bank.

But around Gaza, there has been an increase in violent clashes as Hamas seeks to pressure Israel into signing a new ceasefire agreement. For now, there is no direct correlation between the two incidents but that could change very quickly.

While the West Bank killing takes place in tense political times, shortly after the United States closed down the PLO office in Washington, Israeli security sources say they believe Khalil Jabarin was acting alone and not connected to one of the Palestinian organisations.

They emphasise that despite the complete deadlock in the diplomatic process, the daily security coordination with the Palestinian Authority’s security apparatus remains strong.

But clashes between the IDF and Palestinians on the Gaza border have intensified over the last week.

In addition to the ongoing weekly demonstrations near the fence on Fridays, organised rioting has taken place nightly at a number of locations near the fence. The IDF has reported an increase in the number of improvised explosive devices thrown at its patrols.

After a fortnight in which Hamas prevented the launch of flaming kites and balloons from Gaza, they returned this week, setting fire to scrubland in Israel’s south.

In at least two cases, balloons were located carrying hand grenades. These were successfully disarmed without exploding.

The use of grenades was a clear indication that these were not just teenagers involved in a “popular struggle” and that an armed group was involved.

Sources say the increase in violent clashes is down to a standstill in Egyptian-brokered negotiations for a ceasefire deal and Hamas’ attempt to add pressure on Israel to make concessions.

A deal had been agreed in principle a month ago, but all sides had reservations.

Hamas has demanded that Israel and Egypt immediately ease the closure on Gaza, while the Israelis and Egyptians insist that Palestinian President Mahmoud Abbas, who controls the transfer of funds to Gaza, gives his blessing to the agreement.

Mr Abbas is reluctant because he sees the deal as undercutting the Palestinian Authority’s role in Gaza.

There has also been criticism within the Israeli government that the ceasefire deal does not include the release of two Israeli citizens and the remains of Israeli soldiers held by Hamas.

A deal appeared imminent just a few weeks ago but now looks increasingly remote.

The IDF has been anxious not to escalate the situation during the High Holy Days but senior officers now believe the chances of another round of violence with Gaza is increasingly likely.

Although the developments in Gaza and the West Bank have been largely detached from each other over the last four years, the last war in Gaza in the summer of 2014 was triggered by the kidnap and murder of three Israeli teenagers by Hamas operatives in Gush Etzion.

While the murder of Mr Fuld on Sunday is currently seen as an isolated event and Israel has not detected a general rise in violence in the West Bank, the major concern is that Mr Abbas, in protest over the latest American moves, could decide to downgrade or even end the security coordination.

If that happens, an increase in Hamas attacks in the West Bank and an escalation in Gaza would be almost inevitable.