The men killed in the Abu Sneineh neighborhood of Jabal Johar village were identified as Nashat al-Karmi, a senior commander of the al-Qassam Brigades, and Maamoun al-Natsha, a local Hebron commander, the Palestinian Ma'an News Agency reported.
The Israeli daily Haaretz reported the two men were wanted for attacks against Israelis.
Witnesses said Israeli troops confiscated cameras from journalists at the scene and imposed a curfew on the southern West Bank district.
Residents said the soldiers surrounded three homes belonging to Radwan Ar-Rajabi, Saadi Barwan and Ayoub Gheith and demolished the fence around them.
Israeli bulldozers were seen demolishing a three-story home in search of Palestinians, witnesses said. The Israelis also detained Ayoub Ismael Ar-Rajabi and Musab al-Atrash, witnesses said.
An Israeli spokeswoman told Ma'an there was continuing military activity in Hebron.
The al-Qassam Brigades issued a statement vowing to avenge the deaths, the BBC reported.
Last month, four Israeli settlers were killed when Palestinian gunmen opened fire on their car near Hebron.
The Qassam Brigades later described the attack as a "heroic operation."