NABLUS, West Bank ? Thousands of Palestinians on Monday poured onto the streets of Nablus in defiance of a 40-day-old Israeli army curfew, the strongest challenge yet to the Israeli army restrictions on West Bank cities and towns.

If Nablus residents effectively lift the around-the-clock curfew on their own, such actions could spread to other West Bank cities. Nablus Gov. Mahmoud Aloul, who had urged his people to defy the curfew, said Palestinians should follow the Nablus model.

“People who can’t find food and need medicine and treatment should break the doors of their jail,” Aloul said in an interview with The Associated Press.

Early today, a Palestinian entered a house in the Jewish settlement of Itamar near Nablus and stabbed a settler and his wife, seriously wounding them, rescue officials and Israel Radio said, adding security guards at the settlement killed the infiltrator.

Shops, banks and offices opened to accommodate the curfew-breakers, who filled the streets of Nablus. Israeli soldiers in armored vehicles ringing the city stood by without response, in contrast to tough reactions to earlier violations in which troops have even opened fire on people because of misunderstandings over the curfew’s duration.

“There is a curfew and we are aware of the violations,” military spokesman Lt. Col. Olivier Rafowicz said Monday of the situation in Nablus. “For the moment, we are not responding.”

In some cities, the curfew is often lifted during the day, and then reimposed before nightfall. But the restrictions have been particularly tight in Nablus, where the curfew has been officially lifted five times, for a few hours at a stretch, in the last 40 days.

On Monday, the curfews were lifted for the day in Tulkarem, Qalqiliya and Hebron.

The restrictions, imposed when Israeli forces took over seven of the eight main Palestinian population centers last month in response to suicide bombings, have worsened already difficult conditions for Palestinians in the West Bank. International aid agencies warn some are facing malnutrition.

Preliminary figures from a U.S. government report show that 30 percent of Palestinian children are suffering from malnutrition, up from 7 percent since the fighting began.

In response, Israel pledged to release $15 million to the Palestinian Authority on Monday, the first such transfer since fighting erupted in September 2000.

The transfer, the first of three planned installments, is a small fraction of the estimated $600 million in taxes and customs revenues Israel has collected on behalf of the Palestinians. Up to now, Israel has refused to release the money, contending it might be used to finance terror attacks.

Under interim peace accords, Israel collects customs and taxes for Palestinian goods transiting Israel and transfers the money to the Palestinian Authority.