They said Rubeen Abed Fares, 30, and Yunis Jahjouh, 22, were both shot in the chest and Jihad Aslan, 20, died of brain damage.
The hospital officials said all the casualties had been hit by live ammunition.
An Israeli police spokeswoman said that border police used "riot dispersal means" to disperse a stone-throwing crowd of 1,500 people, but she could not immediately confirm any fatalities or the use of live fire.
"In the early hours of the morning a border police team went into Qalandiya camp to arrest a hostile terrorist activist," spokeswoman Luba Samri told AFP.
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"We do not know of any fatalities on the other side," she added. "We know of three injured who were taken to a (Palestinian) hospital but we do not know of danger to their lives."
She said that three border policemen were lightly injured by stones.
The bloodshed came as Israeli and Palestinian negotiators were expected to meet for another round of peace talks, formally resumed this month after a hiatus of nearly three years, thanks to an intense bout of shuttle diplomacy by US Secretary of State John Kerry.
Speaking in Amman on Saturday after talks with chief Palestinian negotiator Saeb Erakat, Jordanian Foreign Minister Nasser Judeh said he expected the next round to take place "a few days from now."
"What happened today in Qalandiya shows the real intentions of the Israeli government," Palestinian president Mahmud Abbas's spokesman Nabil Abu Rudeina," told AFP as reports of the shooting started to emerge.
He called on the US administration to "take serious and quick steps" to prevent the collapse of peace efforts.