The Israeli army said a shooting attack had occurred near the Beit El settlement, close to Ramallah. Israeli medics said two of the three wounded had serious injuries.
"A gunman opened fire near Beit El, north of Jerusalem," the Israeli military said in a statement.
"Forces at the scene responded to the attack and shot the assailant, resulting in his death. Three Israelis were wounded and are being evacuated for emergency medical treatment in hospital."
An AFP journalist saw the body of the Palestinian man killed near the checkpoint. A silver car apparently used in the attack was next to the body.
Also Read
The car had plates seeming to indicate it belonged to the Palestinian government.
A Palestinian intelligence source said Israeli authorities had informed them that the man, Amjad Abu Muamar, around 30 years old, worked as a bodyguard for the Palestinian attorney general's office.
Palestinian ambulances sought to move toward the body, but were prevented from doing so by Israeli soldiers.
The violence has killed 25 Israelis, as well as an American and an Eritrean, according to an AFP count.
At the same time, 160 Palestinians have been killed by Israeli forces, most while carrying out attacks but others during clashes and demonstrations.
Some analysts say Palestinian frustration with Israel's occupation of the West Bank, the complete lack of progress in peace efforts and their own fractured leadership have helped feed the unrest.
Israel says incitement by Palestinian leaders and media is a main cause of the violence.
International efforts to halt the violence have so far failed.
French Foreign Minister Laurent Fabius said Friday his country was looking to revive plans for an international conference aimed at bringing about the two-state solution.
Should efforts to breathe life into the moribund peace process fail, France would move to unilaterally recognise Palestine as a state, Fabius said.