Ahmad al-Mahdi, 23, was fatally wounded in the exchanges in the flashpoint town of Jenin, said security and medical sources on Monday. He was transferred to hospital where his death was confirmed.
The latest death brings the overall toll since the start of Al-Aqsa Intifada in September 2000 to 3745, including 2802 Palestinians and 875 Israelis.
Also on Monday, two Palestinians were wounded and seven arrested in Israeli military raids on the West Bank.
Occupation forces searched numerous houses in Tulkarm and Ram Allah before making the arrests. A Palestinian was wounded in the raid on Tulkarm when Israeli troops opened fire on civilians.
In the Balata refugee camp, east of Nablus, another Palestinian was shot and wounded by Israeli troops before being arrested.
Our correspondent said the Israelis used a civilian vehicle in the raid on the camp.
The detainee, Samir Khdaish, is a member of the Fatah movement's al-Aqsa Martyrs Brigades, the correspondent said.
On Sunday, troops shot and killed a leading member of the Popular Front for the Liberation of Palestinian (PFLP) in a raid on his home in the Rafah refugee camp in the Gaza Strip.
Backed by helicopter gunships, occupation troops raided the Rafah camp and surrounded the home of Ashraf Abu Libda, before shooting him, medics and witnesses said. He sustained multiple bullet wounds.
A six-year old child was shot and
injured in the Rafah raid
Six civilians, including the victim's six-year-old nephew, were also wounded in the attack.
An Israeli army spokesman said the victim had been shot as he tried to escape from his house during the raid to find alleged tunnels used to smuggle weapons across the border with Egypt.
Meanwhile, 24 Palestinian families have been left homeless after Israeli occupation troops demolished 16 homes in Ram Allah, Bethlehem, Jerico and Jenin on the West Bank, over the Eid al-Adha holidays last week.
The Palestinian Centre for Human Rights has strongly condemned "the latest escalation of the Israeli military campaign of retaliation against families of individual Palestinians that Israeli occupying authorities accuse of ordering, facilitating, or conducting attacks against Israeli targets".