"The terrorist was neutralised, apparently killed" a statement said, adding that no Israelis were injured in the incident at the Etzion junction, north of Hebron, in the southern West Bank.
Palestinian officials confirmed the man's death, naming him as Malik Sharif, 25, of Hebron.
The army said he sought to attack soldiers waiting at a busy bus stop in what is known as the Gush Etzion settlement bloc.
"A Palestinian, armed with a knife, attempted to stab the soldiers," a statement said.
The wave of violence that erupted at the start of October has claimed the lives of nine Israelis, 71 Palestinians and an Arab Israeli.
The violence was originally focused in and around Jerusalem, but the epicentre later moved to Hebron.
Earlier today, Palestinians in Hebron buried local man Ibrahim Skafi, 22, who was shot dead a day earlier after allegedly ramming and critically injuring an Israeli border policeman with his car.
Over the past two weeks, around 21 young Palestinians have been shot by Israeli forces in and around Hebron. The army has accused them of trying to stab Israeli security forces or Jewish settlers.
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