The military said the troops were carrying out operations in the area to prevent militant attacks when they saw three Palestinians throwing petrol bombs at an Israeli car traveling on a nearby road.
The troops then opened fire and saw that one suspect had been hit, the military said in a statement. The two other suspects were taken into custody for questioning.
Palestinian officials made no immediate comment about the incident which took place near the West Bank city of Hebron. The Health Ministry provided no further details.
Palestinians seek a state in the West Bank, east Jerusalem and the Gaza Strip, territories Israel captured in the 1967 Middle East war.
In the West Bank, most of which is controlled by the Israeli army, Palestinians have limited self-rule.
Israel pulled out of Gaza in 2005. The enclave is ruled by the Islamist Hamas group and is under an Israeli and Egyptian security blockade. Israel annexed east Jerusalem in a move not recognized abroad and regards the entire city as its eternal indivisible capital.
Peace talks between the sides broke down in 2014.
Reporting by Ali Sawafta and Maayan Lubell; Editing by Christina FincherOur Standards:The Thomson Reuters Trust Principles.