The driver “accelerated his car towards a manned military post” next to Mevo Dotan in the occupied West Bank, they said.
Soldiers opened fire and the car crashed into an Israeli army vehicle, setting both on fire. No soldiers were injured.
The attack happened near the site of an ambush last Thursday in which Palestinian gunmen killed an Israeli motorist as he left a yeshiva in the former settlement outpost of Homesh.
There have been several Palestinian attacks on Israelis in recent weeks. Palestinians also say they have been attacked by settlers, whose residence in the West Bank the international community considers illegal.
Tor Wennesland, the UN Middle East peace envoy, last week said he was “alarmed” by the escalation of violence on both sides, saying the situation had become “volatile".
In Gaza, militant group Hamas praised the attempted attack on the military, but did not take responsibility.