The army described the attacker as a "terrorist," usually used to indicate Palestinian assailants.
Israeli medics said a 15-year-old was critically wounded and a 30-year-old was severely hurt at the Kiryat Arba settlement, but further details were not clear, including how the second person was injured.
Initial reports from medics described the attack as a shooting before the army said it was a stabbing, but details were still emerging.
"The attacker was shot, resulting in his death. Two civilians were wounded and are being evacuated to a hospital for further medical treatment."
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Violence since October has killed at least 211 Palestinians, 32 Israelis, two Americans, an Eritrean and a Sudanese.
Most of the Palestinians were carrying out knife, gun or car-ramming attacks, according to Israeli authorities.
Others were killed in clashes with security forces or by Israeli air strikes on the Gaza Strip.