"Mohiyeh al-Tabakhi, 12, was killed by shots fired by occupation soldiers in the Al-Ram area near Jerusalem," it said in a statement.
The Palestinian suburb in the occupied West Bank near Jerusalem is cut off from the Holy City by the "separation wall" built by Israel.
The boy was hit in the chest by a rubber-coated bullet which caused cardiac arrest, medical sources were quoted by the Palestinian news agency WAFA as saying.
Israeli police said tear gas grenades and sound bombs had been used against demonstrators in the area.
More From This Section
"There was no live fire," she added.
Violence in the Palestinian territories and Israel since last October has killed at least 217 Palestinians, 34 Israelis, two Americans, an Eritrean and a Sudanese, according to an AFP count.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, according to Israeli authorities.
Others were shot dead during protests and clashes, while some were killed by Israeli air strikes on the Islamist-controlled Gaza Strip.