The Israeli army said the Palestinian was killed in an exchange of fire during an arrest mission in Ramallah.
Palestinian health ministry identified the dead Palestinian as Basel al-Araj, 31. Israeli police spokesman Micky Rosenfeld described al-Araj as the head of a cell that planned attacks against Israelis.
According to the Israeli army, two firearms were seized during the raid. Regular raids by the Israeli army and police units in the occupied West Bank are controversial because they often involve incursions into Area A, which was designated as solely under the remit of Palestinian security forces in the Oslo peace accords.
Since October of 2015, more than 265 Palestinians have been killed by Israeli forces – either during alleged attacks on Israelis or in clashes with Israeli forces, according to official Palestinian figures.
Israeli authorities say at least 47 Israelis have been killed by Palestinians over the same period.