Prime Minister Benjamin Netanyahu on Sunday condemned the incident in which a nine-year old girl was allegedly wounded a day earlier in the West Bank settlement of Psagot.
In remarks made at the start of the weekly cabinet meeting, the premier called the incident "a heinous attack."
"This past year has been the quietest in over a decade, but lately we have noticed an increase in the number of terrorist attacks," Netanyahu said, pointing an accusatory finger at the Palestinian Authority.
"I must say that the Palestinian Authority cannot shirk its responsibility for these kinds of incidents as long as incitement there continues," the premier said. "The murderers must understand that this won't help them."
Despite a long period of relative calm, Israeli officials and military observers are concerned that tensions on the ground could escalate.
Former IDF Central Command chief Gadi Shamni fears that in light of the past month's attacks in the West Bank, a new intifada could be in the works.
"The events of the past month may lead to an escalation in the West Bank," Shamni told Army Radio.
"It's very difficult to determine if this is the start of an intifada," he continued.
"However, we have here the evidence of three separate events. We need to look at them. They may not be related to each other, but I have no doubt that once events such as these occur, this can encourage all sorts of people who might not have acted, to act."
The attacks he is referring to include the kidnapping and killing of soldier Tomer Hazan by a Palestinian co-worker; the shooting of Givati infantry soldier Gavriel Kobiin Hebron, both of which occurred three weeks ago; and Saturday night's attack in Psagot.