Mahmoud Titi, 25, was declared dead at a local hospital shortly after being shot, Ynetnews.com said. Two other Palestinians were injured.
The incident occurred late Tuesday after soldiers chased suspects thought to have thrown Molotov cocktails and stones at Israeli vehicles on a highway. Palestinians threw stones at the soldiers and clashes erupted, the website said. The soldiers said they opened fire after feeling threatened.
A statement by the Israeli army said, "During the disturbance, a part of the force found itself in a situation in which soldiers felt their lives to be in danger and opened fire on the attackers," The Jerusalem Post said.
The army is investigating the incident.