Palestinian security sources said the four were shot in the village of Dair Ballut in the northern West Bank on land confiscated by the Israeli authorities for construction of part of the controversial barrier on Wednesday.
Israeli military sources said three Palestinians had been wounded by Israeli security guards hired to protect the barrier rather than by soldiers.
The sources added that the victims were among a group who had been throwing stones during a protest against the barrier, large parts of which jut into the occupied territory.
Meanwhile, four Palestinian officials have been charged over accusations that they siphoned off $1.7 million of public funds.
Two of the defendants are in custody, while two others have fled to neighbouring Jordan, a senior official said on Wednesday.
The two under arrest are suspected of diverting the funds for
their personal ends, and their case files have been forwarded to the state prosecutor.
The Palestinian Authority has submitted a request to the government in Amman for the extradition of the other two, who are also suspected of involvement in the scandal, said the head of the Palestinian intelligence service, Tawfiq al-Tirawi.
He added, several other officials were likely to be interrogated shortly on the orders of Palestinian President Mahmud Abbas, who has pledged to curb corruption within the Palestinian Authority.
While al-Tirawi did not reveal the identities of the four who have been charged, other officials who spoke on condition of anonymity said three were employees of the Finance Ministry while a fourth worked in the presidential office.