Osman Sadaka, 26, from Jenin, and Mustapha Ghani, 20, from Tulkarm, were killed in a clash when an Israeli unit advanced into Nablus and surrounded a building, said Palestinian medical sources.
The wounded Palestinian was captured by Israeli occupation forces, they said.
An Israeli army spokesman said that an arrest operation was under way in Nablus and that three Palestinians had at least suffered injuries in an exchange of gunfire.
Journalists were prevented from entering the area to cover the incident, an Aljazeera correspondent said.
The deaths bring the overall toll since the September 2000 start of the Palestinian uprising to 5,055, according to an AFP count.
The Palestinian foreign minister will visit Beijing at the end of the month to attend a China-Arab forum, a Chinese foreign ministry official has said. The minister, Mahmud al-Zahar, is also a senior Hamas leader.
Zhai Jun, the director general of the foreign ministry's West Asian and North African division, told reporters on Wednesday: "We have extended the invitation to all the Arab countries. Foreign minister al-Zahar of Palestine will attend the meeting."
Zhai said Chinese foreign minister, Li Zhaoxing, would meet al-Zahar, who will be attending the China-Arab Cooperation Forum in Beijing on May 31 and June 1.
The visit will be the first to China by a Hamas leader since the Islamic movement formed a government after winning elections in January.
China will become the second permanent United Nations Security Council member after Russia to host a Hamas leader since the Palestinian elections.
The United States and the European Union regard Hamas as a terrorist organisation and have frozen aid to the Palestinian Authority, saying it failed to renounce violence and recognise Israel.
The United States has been leading efforts within the international community to cut all political contact with Hamas.