Khalid Musa Salah, 52, was a professor of electrical engineering at Najah National University in Nablus.
Palestinian sources have described the overnight killing of Salah and his son, Muhammad, as a "totally unjustified cold-blooded murder".
The sources said Salah was killed as he opened the main door of his apartment after he was ordered to do so by Israeli troops conducting a raid on the building where he lived. The incident took place in front of other family members.
Salah and his son were both US citizens.
The Israeli army later blew up the four-storey building, leaving many Palestinian families - including the Salah family survivors - homeless.
Palestinian sources said the army didn't allow residents to take their furniture and belongings out before the demolition was carried out.
An Israeli army spokesman, Eitan Arusi, denied that troops entered Salah's apartment. "Our soldiers were firing from the outside," he said.
"The two civilians were killed during an exchange of fire with the terrorist who fled to the building. It was dark and it is not clear whose fire killed the two civilians."
The Israeli army said the "incident is being investigated".
The West Bank town of Nablus is
a frequent target of Israeli raids
Najah University has declared a three-day mourning period and appealed to academic institutions around the world to condemn the killing of professor Saleh.
"The man had no political affiliations," said Riyad Abdul Karim, dean of the engineering department at Najah University.
"He didn't really get involved in politics. He was a brilliant academic. They murdered him in cold blood for no reason other than wanting to shed Palestinian blood."
Salah started work at the university in 1979. He got his masters degree in electronics engineering in 1980 from the UK, and his PhD in electrical engineering from University of California at Davis in 1985.
On the spot
Palestinian sources said the killings took place shortly after Israeli troops searching for resistance fighters encircled the building where Salah lived with his family - at the edge of the Ain Baitalma'a refugee camp.
The soldiers reportedly began banging on apartment doors, ordering residents to open them.
"When he opened the door for them, they immediately opened fire on him and his son, killing them both on the spot," neighbours quoted Salah's wife as saying.
Israeli troops blew up the four-
storey building after the killings
She has since suffered a nervous breakdown, according to reports.
Subsequently, the Israeli army said "two civilians were killed" but did not explain the circumstances.
The security operation in which Salah and his son were killed was launched shortly after an Israeli special forces officer died and three soldiers were wounded during a military raid on the Ain Baitalma'a refugee camp area.
Two Palestinian resistance fighters were killed in that incursion. Identified as Yamen Faraj and Amjad Arar, they were members of the leftist Popular Front for the Liberation of Palestine.
Faraj was a senior at the journalism college of Najah University.
A spokesman for the US consulate in Jerusalem refused to comment on the killing of the Salah and his son.
On several occasions in the past, Palestinian Americans living in the West Bank and Gaza Strip have criticised consulate officials for failing to defend their rights in the face of mistreatment and attacks by Israeli occupation forces.
Several Palestinians holding US citizenship have been killed by the Israeli army since the outbreak of al-Aqsa Intifada in October 2000.
Prominent among them was an American peace activist who was crushed to death by an Israeli bulldozer last year while trying to prevent the demolition of a Palestinian home in the Gaza Strip.
"[Khalid Musa Salah] had no political affiliations. He didn't really get involved in politics. He was a brilliant academic"
Riyad Abdul Karim,
Dean, Engineering Department, Najah University
Israel insists its soldiers don't deliberately kill Palestinian civilians.
Palestinians and many human-rights groups say Israeli troops kill civilians, including children, wilfully.
Last year, a well-known Israeli journalist, Amira Hass, reported that up to 80% of Palestinians killed by Israel in the course of the current intifada were not involved in hostilities between the Israeli army and Palestinian resistance groups.