Israeli troops shot dead a Palestinian and wounded two others between the West Bank villages of Beit Sira and Beit Ur early on Tuesday, Palestinian security officials told AFP.
They named the dead man as Mahmoud Badran, 20, and said Israeli liaison officials told them soldiers opened fire on the three as they hurled rocks at traffic on a nearby Israeli highway West of Ramallah.
The army said that troops shot two men, "after a number of Palestinians hurled rocks and Molotov cocktails at moving vehicles near the village of Beit Sira on route 443".
"An initial review suggests that as the mob continued, nearby forces acted in order to protect the additional passing vehicles from immediate danger and fired towards the assailants," a military statement said.
"Forces confirmed hits resulting in the death of one of the attackers. At the moment I am aware of one other attacker that was wounded and treated by medical forces and later evacuated to hospital. Two additional suspects were arrested."
The busy highway 443 cuts through the occupied West Bank for several miles on its way from Jerusalem to Tel Aviv.
Israeli media reported that several vehicles had been damaged and two drivers lightly injured by glass from shattered windscreens as the Palestinians threw bottles and heavy stones at traffic.
Since October violence in Israel and the Palestinian territories has killed at least 209 Palestinians, 32 Israelis, two Americans, an Eritrean and a Sudanese.
Israeli authorities say most of the Palestinians were killed as they carried out knife, gun or car-ramming attacks.
Others were killed in clashes with security forces or by Israeli air strikes in the Gaza Strip.
In the northern West Bank, Israeli forces early on Tuesday demolished the home of a Palestinian who killed a US tourist and wounded several Israelis in a March stabbing rampage in Tel Aviv, an Israeli army spokeswoman told AFP.
"Overnight, in accordance with government directives, security forces demolished the home of Bashar Massala, in the village of Haja," she said.
Palestinians named the man as Bashar Madhala.
The spokeswoman said he carried out the March 8 seafront knife attacks which killed 29-year-old Texan Taylor Allen Force and wounded at least 10 Israelis as US Vice President Joe Biden arrived for a visit.
Peace negotiations between the Israelis and Palestinians have been at a standstill since a US-led initiative collapsed in April 2014.
In a bid to revive the moribund peace process, France is seeking to convene an international peace conference later this year.
A meeting of European Union foreign ministers in Luxembourg on Monday voiced support for the project, although Israel reiterated its objections.
"The EU is determined, alongside other regional and international partners, to contribute in a concrete and substantial manner to the development of a set of incentives for the parties to make peace, with the prospect of an international conference scheduled before the end of the year," a statement by the ministers said.
Israel says that such a gathering would reduce the likelihood of direct bilateral peace talks between the parties.
"International conferences like the one welcomed by the European Council today drive peace further away by allowing the Palestinians to continue avoiding both direct negotiations and compromise," Israeli foreign ministry spokesman Emmanuel Nahshon said in a statement on Monday evening.
"This is a regrettable step backwards in the pursuit of peace to which Israel remains fully committed."
Senior Palestine Liberation Organisation official Hanan Ashrawi praised the Luxembourg declaration.
"We welcome the EU Foreign Affairs Council's decision to endorse the French initiative to hold an international peace conference later this year," she wrote in a statement.
"The international community must undertake a concrete action plan with comprehensive objectives, specific terms of reference that guarantee an end to Israel's military occupation and ensure sovereignty and independence for Palestine within a specific and binding timeframe, and mechanisms for arbitration, monitoring and evaluation."