"We are doing the utmost to ensure security," Police Minister Moshe Shahal told reporters after a cabinet meeting.
Israel Radio said heightened security was also in place at Israeli embassies and Jewish sites abroad against an Islamic Jihad strike following the assassination of Fathi Shqaqi in Malta on Thursday.
Islamic Jihad accused Israel's Mossad secret service of gunning down Shqaqi and vowed to launch strikes against Jews.
But in an apparent nod to a Middle East and North African business conference which is taking place in Jordan -- and where regional countries are seeking tens of billions of dollars to pay for vast development projects to refocus the area from war to peace -- Israel did not cut off the Palestinians' economic lifeline by sealing self-ruled Gaza and the occupied West Bank as it has done in other security alerts.
Instead, the army raised the age of Gaza workers allowed into Israel from 30 to 35, barred all students and vehicles from leaving the enclave and said no permits would be issued for Palestinians from the West Bank and Jerusalem to go to Gaza.
Israeli security sources said the restrictions were spurred by intelligence that an Islamic Jihad man in Gaza was plotting a suicide attack in Israel.
Palestinian officials criticized the move. "This was done unilaterally. We demand the Israeli side reconsider," said Jamal Zahout, the Palestinian Authority's liaison on civil affairs with Israel.
The Islamic Jihad Movement in Palestine and the militant Hamas group have carried out a series of suicide attacks that have killed more than 80 people since Israel and the Palestine Liberation Organization signed a peace deal in 1993.
Asked about the killing of Shqaqi, Israeli Prime Minister Yitzhak Rabin told reporters at the Amman conference: "Oh, leave it aside. We deal with the major problems of peace in the Middle East." He said Saturday he was "certainly not sorry" Shqaqi was dead.
Hassan Asfour, a key member of the peace negotiations planning department for the Palestinian Authority, told Reuters: "All that we have indicates or points towards Israel doing this deed because it's in Israel's interest."
He added: "Surely we condemn strongly this operation which does not serve the peace process."
Israel and the PLO signed a deal last month, known colloquially as Oslo B, to expand Palestinian self-rule beyond Gaza and Jericho to more of the West Bank.
Israel has long warned the Palestinian Authority it must take strong action to curb Islamic militant attacks if a handover of powers is to proceed smoothly.
After a tough crackdown in recent months in Gaza, the Authority stepped up contacts with Hamas on reaching an understanding that would end attacks. Islamic Jihad has remained relatively cold to overtures.
Nonetheless, it has been more than two months since the last suicide attack, a Jerusalem bus bombing that killed six people.
"All indications we have had in the last period indicated that those groups were taking into consideration the responsibilities the Palestinian Authority has with the Israeli side and the significance of signing Oslo B," Asfour said.
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