In the village of Anin, near the West Bank city of Jenin, around 500 Palestinians, foreigners, and Israelis had staged a demonstration to protest against the building of the Israeli security wall.
US President George W Bush has also criticised ongoing plans to complete the eight metres high wall up to 1000 km long with round watchtowers every 200 metres.
The injuries of the protestors were caused by both rubber and live bullets and one of the five was seriously injured, medical sources told Agence France Presse.
The army opened fire when the crowd, led by a group of 100 International Solidarity Movement (ISM) activists, tore down a gate in the wall near Anin, a spokesman for the activists told AFP.
An American protester was struck in the leg at close range during the clash and was taken to hospital, Israeli demonstrator Yonatan Pollak told Reuters.
Israeli forces also stormed Jalboon village, east of Jenin, on Monday, imposing a curfew in the area, Aljazeera’s correspondent in Palestine reported.
Wall cuts into Palestinian territory
The wall, which the Israeli government started building a year ago to prevent infiltrations from West Bank militants, dips deep into Palestinian land.
The gate was built into the wall in order to allow farmers whose villages have been severed from their land to work on their crops, but it has always remained locked, the spokesman explained.
The ISM has been leading an aggressive campaign in recent weeks to protest against the fence as well as roadblocks hampering freedom of movement in the West Bank.
Rachel Corrie, a 23-year-old US peace activist, was crushed to death by an Israeli army bulldozer in the Gaza Strip town of Rafah in March and Briton Tom Hurndall was declared clinically dead after being shot by the army in the same area a month later.
The group was recently blacklisted by the Israeli authorities and foreigners wishing to enter the Gaza Strip must certify they do not belong to the movement and will not disrupt Israeli army activities.
The clash happened as Israel made more concessionary gestures to the Palestinians, agreeing to release around 540 prisoners within a week, including 210 affiliated to Islamic Jihad and Hamas, after being approved by the cabinet, a senior government official said Sunday as Prime Minister Ariel Sharon flew to Washington to meet George Bush.
The official ceremony which was due to inaugurate the first section of the wall separating the Jewish state from the West Bank has been cancelled, the defence ministry announced on Monday.
A spokesman told AFP that the construction works were on schedule but that the Israeli authorities "had chosen to express their appreciation to the people working on the project in a different way."
The Yediot Aharonot daily, however, reported that Thursday's ceremony for the 80-mile (130-kilometre) section of the wall between Salem and Elkana was deferred in order not to upset Washington as Israeli Prime Minister Ariel Sharon prepares for talks with US President George W Bush.