"The forces encountered the suspect, who attempted to open fire at them," a statement from the Israeli army read. "In response to the immediate threat forces fired towards the attacker resulting in his death."
The Palestinian, identified by Israeli police as 34-year-old Amar Halil from Nabi Salah, was believed to have shot at Israelis in the West Bank in two separate incidents on Saturday, the army said.
Another Palestinian suspect was lightly wounded and arrested, the statement from the military read.
A wave of unrest that broke out in October 2015 has claimed the lives of at least 282 Palestinians or Arab Israelis, 44 Israelis, two Americans, two Jordanians, an Eritrean, a Sudanese and a Briton, according to an AFP toll.
Israeli authorities say most of the Palestinians killed were carrying out knife, gun or car-ramming attacks.
Others were shot dead in protests and clashes, while some were killed in Israeli air strikes on the Gaza Strip.
The violence had greatly subsided in recent months.