The ambush, carried out by al-Aqsa Martyrs Brigade, took place in the Palestinian village of Ein Yabrud near the Israeli settlement of Ofra.
The soldiers were on patrol in the village - which is now under curfew - when they were attacked in a so-called drive-by shooting.
Within an hour of the attack more soldiers entered the village and began searching for the gunmen.
Medical sources confirmed that three critically wounded had died while upto three more were injured.
Shooting was still going on at the site of the ambush as the first reports came in, Israeli military sources said.
An Israeli army spokesman confirmed the deaths to Aljazeera.net. When asked if the dead were civilian or military, he added: "We can confirm the dead are soldiers and another one was wounded.
"We are conducting a search of the village. A vehicle drew up and fired shots. There was no exchange of fire."
Less than an hour after the incident a statement released by the al-Aqsa Martyrs Brigade claimed responsibility for the deaths.
In June settlers in the area tried to block the way to army soldiers trying to dismantle outposts built since Israeli Prime Minister Ariel Sharon took office in March 2001.
These and hundreds of others must be scrapped under the terms of the "road map", the latest attempt to bring peace to this troubled region.