"Apparently one wounded, terrorist neutralised," police said in a statement. The army said he was shot.
Israeli medics said they were treating and evacuating to hospital a 20-year-old in serious condition with stab wounds to his torso.
The incident took place at Al Fawwar junction near the flashpoint city of Hebron, which has been a focal point in nearly two months of Palestinian stabbings, shootings and car rammings targeting Israelis.