The Palestinian Ministry of Health and Palestine TV later identified the teen who died as Amjad al-Fayed from Jenin.
The Israel Defense Forces said they were responding to live fire, Molotov cocktails and explosives being thrown at their troops during an operation in the area.
Local media and eyewitnesses reported that an undercover Israeli military unit was on a main road in the city of Jenin near the outskirts of the Jenin refugee camp, when they were exposed by residents. Then, clashes erupted between Israeli forces and Palestinian militants.
The IDF said that their forces came under fire from a passing vehicle.
“During IDF operational activity near the town of Kafr Dan overnight, a number of suspects shot live fire at IDF soldiers from a passing vehicle. The suspects also hurled Molotov cocktails and an explosive device toward the soldiers. The soldiers responded with live fire toward the suspects. Hits were identified,” an IDF statement read.
Exchanges of gunfire can be heard in clips of the military raid shared on social media.
Other showed Palestinian medical crews and paramedics attempting to resuscitate al-Fayed and showed the 18-year-old on a hospital bed at Jenin hospital.
Tensions have been particularly high for months in Jenin.
Al Jazeera veteran correspondent Shireen Abu Akleh was shot and killed there on May 11 while reporting on an Israeli raid. Her producer was also wounded during the incident.
Two days later an Israeli officer was shot during an exchange of gunfire with Palestinian militants in Jenin, which also left two Palestinians injured. Noam Raz, the Israeli officer, later died of his injuries.
The Palestinian Ministry of Health says that, of the 56 Palestinians killed since the beginning of the year, 18 have been from Jenin.
At least 18 people on the Israeli side have been killed in Palestinian militant attacks since mid-March, according to a CNN count. The IDF says that a disproportionate number of the attackers came from Jenin.
A general strike was announced for Saturday in Jenin over the killing of al-Fayed, Palestine TV reported.
Al-Quds brigades, the militant wing of Islamic Jihad, released a statement of mourning for al-Fayed on their official Telegram channel, saying his uncles were members of Islamic Jihad and had participated in an ambush in 2002 that killed 13 Israeli soldiers.