Suspected Jewish extremists have set fire to two Palestinian homes in the West Bank, killing a child and critically injuring four people.

Israeli police said the child was a year and a half old and military spokesman Lt Col Peter Lerner called the attack "nothing short of a barbaric act of terrorism".

The military said the assailants entered the village of Duma in the early hours, where they torched the houses and scrawled Hebrew graffiti.

Troops are scouring the area for the suspects.

Jewish extremists have attacked Palestinian property for years, as well as mosques, churches and even Israeli military bases in opposition to what they see as the state's favourable policies towards the Palestinians, but it is rare for anyone to be killed in such attacks.

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