A Swedish peace activist told Aljazeera.net that she was hit by a rubber bullet as she stood by the side of a road recording the activities of the army.
Ulrika Andersson, 25, said that she had been speaking to a soldier a few minutes before being shot.
''I walked up to the military jeep because I wanted to tell the soldier to stop shooting. It was obvious that the soldier wasn't interested in talking to me, so I walked back and stood at the side of the road where I was joined by some children.''
Andersson claims the soldiers observed her for a few minutes before aiming in her direction and firing a bullet.
''There is no way that this happened by accident, I am a tall woman and the soldiers where aiming for my head area. A rubber bullet hit me in the collar bone and it was very painful. I began to bleed.''
Andersson was offered medical treatment from a local ambulance crew.
''I feel very angry that these soldiers think that they can get away with behaving in such an aggressive and illegal manner".
A resident in the camp told Aljazeera that six children also had been hit by rubber bullets.
''The children were throwing stones at the tank, the soldiers started firing rubber bullets, tear gas and sound bombs in their direction'', said a local man.
The witness said some of the children had to receive medical treatment.
Local people have told Aljazeera.net that two houses in the camp have been occupied by soldiers, it is not known if the families have been allowed to leave the house before the soldiers entered.
No way out for Palestinians
imprisoned in Balata
Earlier in the day, the Israeli army blocked an entrance to the camp by using a bulldozer to carry earth and create a road block.
Three military jeeps and a tank have been circling the camp since early morning, local people report.
Aljazeera correspondent Khalid Amayreh, based in the West Bank, told Aljazeera.net that he was not surprised to see the Israeli army back in Balata.
''The Israeli army has been ganging up on the residents of the Balata camp for some time now. Balata has been reduced to a virtual detention camp''.
Aljazeera.net contacted the Swedish foreign ministry,a spokesperson said that the ministry was investigating the shooting.
''It's not good to hear that one of our citizens has been injured, and as far as we know she is ok, she has received medical attention. We will be taking this up with our counterparts in Israel'', said spokesperson Andreas Norman.
A spokesperson for the Israeli army confirmed that they were carrying out an operation in Balata camp saying '' we hope to be successful with this operation''.