The resistance group al-Aqsa Martyrs Brigades claimed responsibility for the ambush on Friday outside the settlement of Itamar.
One of the security men was shot in the back and seriously wounded by the fighter. He later died in hospital. Itamar is situated on a hill overlooking the Palestinian city of Nablus.
Palestinian fighters often target settlements in the course of an almost four-year-old uprising against Israel in the West Bank and Gaza, territories it occupied in a 1967 war.
All Israeli settlements in West Bank and Gaza are considered illegal under international law.
Nablus is the largest stronghold of West Bank fighters and subject to constant Israeli army attacks and blockades.
Meanwhile, in a statement sent to Aljazeera, Izzuldin al-Qassam brigades, the military wing of Hamas, announced that its fighters attacked the Israeli settlement Nitsr Hazani in the Palestinian city of Khan Yunis, in Gaza.
Al-Qassam brigades added that two mortar missiles were used in the attack.