The Israel Defense Forces (IDF) said Wednesday's incident took place while a group of 20 Israeli boys, who were accompanied by adults, went on a hiking trip near the village of Qusra. It said train service in southern Israel was briefly halted after the mortar attack.
Ghassan Douglas, a Palestinian Authority official who deals with the settlements, said that the Palestinian was shot in the chest and later succumbed to his wounds in a Nablus hospital. From conversations with five witnesses to the incident, two soldiers and three settlers, Haaretz has learned that dozens of Palestinians surrounded a group of Israeli youths hiking in the area and threw rocks at them.
The Israeli escalation started after illegal colonists shot and killed one Palestinian farmer, identified as Mahmoud Za'al Odeh, 46, from Qusra.
Saleh added that Israeli forces immediately intervened and fired tear gas and stun grenades at villagers, causing several of them to suffer from severe tear-gas inhalation.
The military said that a medical team rushed to the scene to offer medical care to the Palestinian.
Over 600,000 Israeli Jews now live in settlements in the occupied West Bank and East Jerusalem, making a contiguous Palestinian state virtually impossible. The IDF said it opened an investigation into the incident.
It was not immediately clear if the Israelis coordinated their hike with the military, as is generally required in the West Bank.
Thursday's casualties became the latest in an intermittent two-year wave of violence. Israeli forces have killed more than 260 Palestinians in that time. When Mr Odeh refused, one of them shot him, Mr Daghlas added.
The frequency and intensity of attacks has lessened in the past year.