One of the four was seriously wounded, Ramallah hospital director Ahmad Bitawi said.
The Israeli military said troops were in the Qalandiya refugee camp demolishing the homes of the families of two Palestinians who stabbed and killed an Israeli near Jerusalem's Old City in December.
The assailants in the December attack were shot and killed by Israeli guards, and a second Israeli died after apparently being shot mistakenly by police in the confusion.
The clash came after a few days of increased violence. On Friday, a Palestinian gunman ambushed a family traveling in a car in the southern West Bank, killing an Israeli man and wounding his wife and two teenage children.
The day before, a Palestinian teen stabbed a 13-year-old Israeli-American girl to death as she slept in her bedroom in a West Bank settlement.
The attacks prompted Israel to send hundreds of troops to the area and impose a closure on the Hebron district, where many of the recent attacks have originated.
Also today, Israel's Shin Bet security agency said it has arrested two Palestinians who helped two Palestinian gunmen carry out a deadly shooting attack at a Tel Aviv cafe last month.
The Shin Bet said the gunmen drew inspiration from the Islamic State group, but were not recruited to IS and did not receive training from it. Four Israelis were killed in the attack and others were wounded.
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