Police spokesman Adnan Damiri said today the death occurred the previous night as forces raided the Askar camp to apprehend a suspected arms dealer.
The spokesman said gunmen shot at the security forces, who returned fire. He said bystander Amjad Odeh, 37, was killed in the crossfire. In response to the killing, dozens of protesters in the nearby city of Nablus set fire to police stations.
Palestinian security forces have recently stepped up crackdowns on weapons dealing and possession in the West Bank.
Damiri said the suspected arms dealer was arrested in the raid.