They named the dead man as Mahmoud Badran, 20, and said Israeli liaison officials told them soldiers opened fire at the three as they hurled rocks at traffic on a nearby Israeli highway.
The army said it was looking into the incident but Israeli media reported that several vehicles had been damaged and two drivers lightly injured by glass from shattered windscreens as Palestinians threw bottles and heavy stones at traffic on the busy highway 443.
The road cuts through the occupied West Bank for several miles on its way from Jerusalem to Tel Aviv.
Since October violence in Israel and the Palestinian territories has killed at least 209 Palestinians, 32 Israelis, two Americans, an Eritrean and a Sudanese.
Israeli authorities say most of the Palestinians were killed as they carried out knife, gun or car-ramming attacks.
Others were killed in clashes with security forces or by Israeli air strikes in the Gaza Strip.
Yesterday, a young Palestinian man said to be suffering from Down’s syndrome was buried. He was fatally shot by Israeli troops in the occupied West Bank last month and died in hospital.
PTI