The Israeli army killed two Palestinian men in the northern West Bank Jenin refugee camp early on Wednesday, Palestinian medical and security sources said.
One of the two had been evacuated in serious condition and later succumbed to his wounds, medical sources said.
A third Palestinian who was shot in the leg was in moderate condition.
The Israeli army said that soldiers shot toward "attackers" after "Palestinian gunmen opened fire at the forces and assailants hurled explosive devices at the forces" operating in the camp.
An Israeli army spokeswoman said none of their forces were wounded in the incident.
Israeli forces often carry out searches in the West Bank for suspected militants and weapons manufacturing facilities.
"During an IDF [Israel Defence Forces] operation in the Jenin refugee camp, Palestinian gunmen opened fire at the forces and assailants hurled explosive devices at the forces," the military said in a statement.
"In response to the immediate threat, forces shot towards the attackers."
The Palestinian health ministry said the two Palestinians killed by the troops were aged 21 and 16.
Camp residents made no mention of any Palestinian gunfire in their accounts of the raid in which they said rocks were thrown at the troops.
Mohammed Sadee, who lives in the camp, said he witnessed one of the Palestinians being shot.
"The military jeeps were driving in and this martyr was behind them on a motorbike. They shot him … and he fell to the ground," he said.
A wave of unrest that broke out in October 2015 has claimed the lives of 277 Palestinians, 42 Israelis, two Americans, two Jordanians, an Eritrean, a Sudanese and a Briton, according to an AFP toll.
Israeli authorities say most of the Palestinians killed were carrying out knife, gun or car-ramming attacks.
Others were shot dead in protests and clashes, while some were killed in Israeli air strikes on the Gaza Strip.