Israeli prime minister Benjamin Netanyahu has said that those who are guilty will pay "a heavy price" for the kidnapping of three teenagers who were found dead in the West Bank.
Netanyahu would very much like to break up the unity government of the PLO on the West Bank and the much more militant Hamas in the Gaza Strip.
Despite Hamas's denials and the claims of responsibility by a hitherto unknown organisation today, Israel is now gunning for Hamas. Netanyahu thinks that two of their operatives who have been missing since the kidnapping are guilty.
Their homes have been demolished. But of course, it won't end there.
It seems likely that there will be more air strikes. Perhaps, Hamas leaders themselves will be targeted.
Israel also has the option of further tightening the economic blockade on Gaza.
So it's a poisonous atmosphere. It's much easier to see this situation escalating rather than calming down any time soon.
In fact, it's no exaggeration to say that Israeli-Arab relations are at the most precarious they have been for a decade.
The affair has undermined the moderate PLO and aroused a great deal of anger on the West Bank. Five Palestinian youths have been killed in clashes with the Israeli military.
US peace talks broke up in April.
It's hard - in fact impossible - to see them resuming any time soon.