While the British, the Jewish Agency, Haganah and even the Irgun were collaborating to fight the Germans, and most Palestinian Arabs were playing a wait and see game, one small group of Revisionist Zionists, left the Irgun and formed a new group, The LEHI, or Stern Gang as it was unofficially known after its leader Avraham Stern. LEHI continued to wage war against the British, and, in particular, the CID and its Jewish members whom they regarded as traitors.

The Lehi were particularly inflamed when, in March 1940, the British High Commissioner for Palestine issued an edict that went even further than the white paper. It divided Palestine into three zones.

Zone A consisted of about 63 percent of the country and included most of the stony hills. Land transfers here were forbidden, except to a Palestinian Arab.

Zone B consisted of about 32 percent of the country. Here transfers from a Palestinian Arab except to another Palestinian Arab were severely restricted, exceptions, however, could be made at the discretion of the High Commissioner.

Zone C consisted of about five percent of the country and included the most fertile areas. Here land sales remained unrestricted.

In November 1941 when Ya'acov Jacques, Stern's operational chief was arrested, Stern, now out of prison, took personal charge of LEHI projects. He ordered attacks on the two CID officers most responsible for the arrest of his men, Superintendent Morton and his subordinate Tom Wilkin. On January 20, 1942 the LEHI mounted a multi-stage operation. They created a small explosion suggesting that there had been an accident at a Lehi bomb factory in an apartment on Ya'el street in Tel Aviv. Stern was sure Morton and Wilkin would investigate the incident in person but he was wrong. Deputy Superintendent Solomon Schiff, one of the most senior Jewish policemen (who Lehi had tried to kill before) and Inspector Nathan Goldman arrived instead. A watching Lehi operative, however, incorrectly identified them as Morton and Wilkin.

So, as soon as they reached the roof of the apartment, another LEHI member electronically detonated pre-placed explosives. Solomon Schiff was killed instantly. Inspector Nathan Goldman died the day after. Inspector E. Turton KPM, who had saved a trainload of Jewish people from an Arab mob, had his legs amputated before dying a week later.

Stern was not too displeased with the outcome of the that project since Schiff and Goldman were due to testify against LEHI members who had murdered two Jewish bystanders while robbing a bank official. However, he still planned to assassinate Morton and Wilkin who were now now even more focused on destroying LEHI.

Realizing they were the prime target of LEHI'S explosives experts, CID members now changed tactics when arresting Lehi fighters. They had already received pistol training emphasizing the danger of quick-reacting suspects and promoting instinctive aiming. After the Yael Street bombs they were instructed that if LEHI member disregarded warnings to stay still during arrests they were not to be given the benefit of the doubt but instantly shot.

At the end of January, Morton received information about suspicious activity in an upstairs room at the back of Dizengoff Street. Taking five detectives with him he hurried over and posted three men outside. He, Wilkin and another CID man went upstairs. They found three men inside the room, Zelig Jacques, the killer of Constable Soffioff, Abraham Amper (one of Stern's leading lieutenants ) and Moshe Svorai who had been in prison but escaped while being transported from one prison to another.

Morton shouted in Hebrew "Don't stand up". When the suspects did just that he opened fire killing Jacques and Amper. Svorai received flesh wound. A fourth man Itzak "Yoske" Gazit, who had been in the lavatory was shot in the buttocks by a detective outside, while attempting to escape through the lavatory window.

The CID, however, still hadn't found Stern. About a fortnight later when Moshe Svorai and Gazit were in prison , a prison guard told CID he had overheard Moshe Svorai ask Gazit's mother to take a message to his wife's lodger at a roof top room in 8 Mizrachi Street. Wilkin went off to search the room and found Stern hiding in a wardrobe. He kept Stern on a couch while sending for Morton, reinforcements and handcuffs.

According to Morton when he arrived, Stern made a dash for the window. Morton shot him fearing Stern was about to detonate a bomb. Other people, especially ones who weren't in the room at the relevant time, have different versions.

Whatever the truth, Stern was dead and few, at the time, mourned him. Like Joseph Trumpeldor and Izza al-Kader ad-Din al-Qassam, however, Avraham Stern became more influential in death than in life, partly due to an event that occurred shortly after he was killed.

An unseaworthy ship called the Struma had carried 769 Jewish refugees from a Romanian port on the Black Sea to Istanbul. The refugees applied for entry visas to Palestine. The British Colonial Office under Lord Moyne rejected the applications. The Turks towed the Struma back into the Black Sea and abandoned it. The ship sank leaving only two survivors. The Jews of Palestine became more anti-British than ever and created a hero out of Avraham Stern.

Although the rump of the LEHI initially went to ground, it revived with a vengeance two years later causing mayhem.

In present-day Israel, Stern's reputation is high. Israelis hold an annual commemoration Day for him. The house where he died is now a dedicated museum. His portrait has adorned an Israeli stamp.