Assassination
Following the assassination of Yitzhak Rabin, the Palestinian Authority began to cooperate more closely with Shin Bet in hunting Ayyash. Shin Bet learned (through means that remain classified to this day) that Ayyash had, on occasion, spent the night in the Gaza City home of Osama Hamad, a childhood friend of his. Shin Bet had previously had dealings with Kamil Hamad, Osama Hamad's uncle.
In October 1995, Shin Bet operatives approached Kamil Hamad. Kamil Hamad demanded money and Israeli identity cards for himself and his wives. After the Shin Bet threatened to inform Hamas of his betrayal, Kamil Hamad agreed to cooperate. Shin Bet agents gave Hamad a cell phone, and told him it was bugged so they could listen in on Ayyash's conversations. They did not tell Hamad that, in addition to eavesdropping devices, it also contained 15 grams of RDX explosive.
Kamil Hamad gave the phone to his nephew Osama, knowing that Ayyash regularly used Osama's phones. At 8:00 am on 5 January 1996, Ayyash's father called him. Ayyash picked it up and talked with his father. Overhead, an Israeli plane picked up their conversation and relayed it to an Israeli command post. When it was confirmed that it was Ayyash on the phone, Shin Bet remotely detonated it, killing Ayyash instantly. The Militant, an international communist newsweekly, reported that "100,000 Palestinians... attended the funeral".
The State of Israel has a policy that it never confirms or denies its participation in selective assassinations. Per this policy, Israel did not confirm or deny its role in killing Ayyash. This led to wild rumors and speculations as to the extent of their involvement.
Read more about this topic: Yahya Ayyash