The source did not identify the casualties but an Israeli emergency service spokesman confirmed the man killed in Friday’s shooting was a Jewish settler and that his wife was wounded.
The attack occurred near the Jewish settlement of Shvut Rachel, east of the Palestinian city of Ramallah.
Rise in violence
Israeli-Palestinian relations have plunged further since the collapse last week of a truce that Islamic resistance groups had declared in a nearly three-year-old Intifada or uprising for statehood.
Israel had not recognised the truce and continued its raids into Palestinian territory.
The recent violence has included a bus bombing that killed 21 people in Jerusalem on 19 August and the deaths of eight members of the Hamas resistance group in Israeli helicopter missile strikes.