The Israeli military said troops used live fire and "riot dispersal measures" after about 50 Palestinians threw rocks at them during an operation in the village of Taamun.
Residents said the Israeli force entered several houses looking for Palestinians suspected of anti-Israeli activity.
The dead man was identified as Mohammed Basharat, a 22-year-old university student who was shot in the chest, the medical official said.
Israeli troops frequently carry out raids in the West Bank, including in areas under Palestinian civilian control where Israel retains overall security oversight under interim peace deals.
Palestinians want the West Bank, captured by Israel in the 1967 Middle East war, to be part of an independent state along with the Hamas-controlled Gaza Strip, with East Jerusalem as its capital.
