The military said an army officer chased the assailant after the stabbing at a bus stop near the entrance to Ariel, hitting the attacker with his vehicle, but the attacker managed to get away.
Police spokesman Micky Rosenfeld said the Israeli man died from the stabbing wounds shortly thereafter.
Israeli media identified the stabbing victim as Itamar Ben Gal, a 29-year-old father of four. Channel 2 News aired footage from the scene showing the attacker crossing a busy road and then lunging at the man, taking him by surprise.
Last month, an Israeli was killed in a drive-by shooting near a settlement outpost in the West Bank.
More From This Section
Palestinians seek the West Bank, which Israel captured in the 1967 Mideast war, as part of their future state. Most of the international community views Israeli settlements there as illegal and an obstacle to peace. Israel says the fate of settlements must be resolved through negotiations.
There has been a spike in Palestinian violence since President Donald Trump's December 6 recognition of Jerusalem as Israel's capital.
Palestinian demonstrators have clashed with Israeli troops in the West Bank and along the Gaza-Israeli border, and 19 Palestinians have been killed in the violence since Trump's announcement.