Palestinian health officials said 82 people were hospitalized with gunshot wounds.
Nablus resident Mustafa Shahin said “troops … surrounded the whole area” at around 9:30 a.m. (0730 GMT).
“We kept hearing explosions and gunfire,” he told AFP.
The wounded included Palestinian TV journalist Mohammed al Khatib, who was shot in the arm, his aide told AFP.
The Islamic Jihad militant group said one of its commanders was killed “in a heroic fight”.
Lions Den, a local militant group based in Nablus, said six of those killed were members of Palestinian factions.
Appreciating the military’s “courage”, Defense Minister Yoav Galant tweeted that Israel’s “long arm” would reach “any terrorist”.
AFP correspondents said huge crowds of mourners, including armed men, gathered in Nablus and the nearby Balta refugee camp for the funerals of the 10 killed.
The Palestinian Red Crescent Society said its medics had treated 250 cases of tear gas inhalation and dozens of gunshot wounds.