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The southern West Bank homes of Mohammed Mahamra and Khaled Mahamra were razed overnight by Israeli authorities.

"Overnight in accordance with government directives security forces demolished the residences of the two terrorists who carried out the terror attack at the Sarona market on June 8, killing four civilians and wounding several more," a military spokeswoman said.

The Yatta home of Mohammed was blown up, with the windows of nearby houses shattered by the blast.

The second story of a building where Khaled's family lived a short distance away was demolished by an excavator, witnesses told AFP.

The pair, who are cousins, were charged last month at the Tel Aviv district court for murder, conspiring to murder and attempted murder.

A third suspect also from Yatta, south of Hebron, was charged over allegedly providing them with guns.

Video footage from the June attack showed the two men walking into a popular Tel Aviv cafe wearing black suits, before opening fire on customers at random.

Three people were shot dead, while a fourth died of a heart attack and 15 others were wounded.

According to the Shin Bet domestic security agency, the assault was planned after a July 2015 arson attack by Jewish extremists in the West Bank that killed three members of a Palestinian family, including an 18-month-old baby.

Khaled Makhamrah had wanted to carry out "a revenge attack against Israel in the name of the Islamic State" group during the Muslim fasting month of Ramadan, the Shin Bet said last month.

On Thursday, bystanders gathered around the rubble of what used to be his house, as a Yatta municipality bulldozer cleared the road.

Ammar Makhamrah, a relative of Khaled who lives next to the demolished home, told AFP the Israeli army had given family members time to leave the building and take furniture before razing it.

A short distance away, Mohammad Makhamrah's mother was consoled by women from her family in a building near the rubble that used to be home to her and 10 other relatives.

Israel routinely demolishes homes of Palestinian assailants in what it says is a means to deter further attacks, but rights groups say the measure amounts to collective punishment, with the suspects' families forced to suffer for others' alleged acts.

Agencies contributed to this report.