Nobody on the Israeli side was injured in the incident, near a settlement southeast of Ramallah, the army said in a statement.
"A Palestinian rammed a vehicle into a bus stop at the entrance to Kokhav Yaakov," the statement said.
"In response to the immediate threat, forces fired at the attacker, resulting in his death. A knife was found in the attacker's possession."
The spokeswoman said that both soldiers and civilians had been standing at the stop.
It had come to rest in front of the bus stop, just outside the settlement's closed entrance, he said.
Since October 2015, 249 Palestinians, 40 Israelis, two Americans, a Jordanian, an Eritrean and a Sudanese have been killed, according to an AFP count.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, according to Israeli authorities.
Others were shot dead during protests or clashes, while some died in Israeli air strikes on the Gaza Strip.
Many analysts say Palestinian frustration with the Israeli occupation and settlement building in the West Bank, comatose peace efforts and their own fractured leadership have helped feed the unrest.
Israel says incitement by Palestinian leaders and media is a leading cause.
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