A spokesman for Israel's border police confirmed a Palestinian "terrorist" had been killed.

"A terrorist fired at our troops who responded and killed him," the spokesman said.

The exchange of fire came as Israeli troops were leaving the camp after arresting a Palestinian fugitive wanted for terrorism offences.

"Just as they were preparing to exit the camp, a terrorist arrived on a motorbike and fired towards them," the spokesman added.

The Palestinian health ministry said another three people were wounded in the exchange, one of them seriously.

The second death came in the town of Qalandiya on the northern outskirts of Jerusalem.

Alaa Shaham, in his twenties, was killed by a "live round to the head," the ministry said.

Israeli incursions into Palestinian-administered population centres in the West Bank to arrest wanted suspects frequently lead to clashes.

Qalandiya hosts the main checkpoint between annexed east Jerusalem and the northern West Bank.

Excluding annexed east Jerusalem, the West Bank hosts some 475,000 Israelis who live in settlements regarded as illegal by the international community alongside more than 2.8 million Palestinians.

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