A number of Jewish settlers carrying pistols and one with a rifle approached the village of Qarawat Bani Hassan. At least one of the settlers fired a shot, killing a 27-year-old Palestinian identified as Mothqal Rayyan, witnesses told Reuters.
According to a witness, the Israeli military arrived but only protected the settlers.
The Israeli military announced its soldiers had been dispatched to the scene after clashes erupted between dozens of Palestinians and Israelis. It added the soldiers had responded with riot dispersal measures and shooting into the air, after which the confrontation had ended.
The military said it was aware of reports that a Palestinian was evacuated to hospital before soldiers arrived and was killed as a result of a gunshot wound.
Israeli police told Reuters an inquiry had been opened into the events.
The West Bank has seen a spike in violence since Israel intensified raids last year.
The United Nations marked 2022 as the deadliest year for Palestinians in the West Bank in 16 years.
Israeli forces killed at least 171 Palestinians in the West Bank and occupied East al-Quds last year, including more than 30 children. At least 9,000 others were also injured.