The incident occurred on Thursday near the village of Husan, next to Bethlehem, Israeli military officials said.
The firebomb damaged a car, they said, and soldiers opened fire and killed the attacker.
The military said three firebombs were found next to the body and noted that thousands of Israelis use the bypass road every day, heading to Jewish settlements in the area.
The Palestinian was not immediately identified, and there was no claim of responsibility.
Also on Thursday, Israeli occupation soldiers said they arrested a 16-year-old Palestinian as he tried to smuggle a large mortar shell through a military checkpoint, the army said.
The teenager, Said Sawafta, arrived at the Hawara checkpoint outside the northern West Bank city of Nablus on Thursday morning. Soldiers checking the boy discovered he was carrying two knives and a 52mm mortar shell, the army said.
Nablus is a stronghold for the Palestinian resistance.
The incident marked the sixth time Palestinians were caught smuggling weapons through Hawara in the past two months, the Israeli army said.
Israeli soldiers check the IDs of
Captain Nir Taitz, commander of the Hawara checkpoint, said the youth told his interrogators an uncle had put things in his bag to take across the checkpoint.
The commander said Sawafta would probably be released later in the day.
Meanwhile, a military court ordered Hassan Yousef, a Hamas leader in the West Bank, released from prison to house arrest. The military prosecutors have 72 hours to appeal against the decision, the army said.
Yousef, considered a moderate in the resistance group, was arrested last month before a municipal election.
Although Hamas has not officially announced its list of contenders for a January parliamentary election, Yousef – who has long advocated Hamas turning to politics – is considered a likely candidate.