Palestinian kills two Israelis in West Bank shooting: army

A Palestinian shot dead two Israelis and wounded another at a West Bank settlement's industrial zone on Sunday as security forces hunted the suspected assailant who also worked at the site, the Israeli army said.

Since the attack was allegedly carried out by a Palestinian employed at the Barkan industrial zone in the occupied West Bank, questions were raised over whether he knew the victims and over the motivation behind the shooting.

Army spokesman Jonathan Conricus called it a "terrorist attack" but added that other unspecified factors were involved.

The 23-year-old Palestinian used a homemade gun, known locally as a "Carlo", according to Conricus, in the apparent "lone-wolf attack".

Security forces were searching for the suspected perpetrator, Conricus said. Surveillance footage spread online that appeared to show the Palestinian fleeing the site with a gun.

Magen David Adom emergency medical services said their medics had entered a building at Barkan where they found a man and woman, both without a pulse, and pronounced them dead.

"Later we found another injured woman hiding under a table with gunshot wounds in her upper body," said paramedic Tomer Fine, who was the first responder at the site.

The woman, 54, was taken to hospital, where her condition was stabilised.

Speaking at Israel's weekly cabinet meeting, Prime Minister Benjamin Netanyahu called the shooting "a very severe terror attack".

He was certain the perpetrator would be caught and brought to justice.

The Palestinian Islamic Jihad militant group called the attack a "natural response" to Israeli crimes in Gaza, Jerusalem and Khan al-Ahmar, a Bedouin village in the West Bank slated for demolition.

The industrial zone is located next to the Israeli settlement Barkan and near the settlement of Ariel in the north of the West Bank.

Palestinians work side by side with Israelis in the industrial zone.

Palestinians often face tough choices in finding employment in the economically struggling West Bank and jobs in Israeli settlements can provide steady income.

Speaking at Barkan, Yossi Dagan, head of a regional council for Israeli settlements in the area, said there were "Jewish and Palestinian workers standing outside together and crying".

Some Israeli media reported the Palestinian suspect had been recently fired from his job at the site, raising speculation the attack may have been motivated by a personal vendetta.

The army, however, said the alleged shooter was still employed at the site as of Sunday, but noted he had been away from work in recent days.

The attack took place at the Barkan depot of the Alon Group, which manufactures recycling and environmental products, according to Eran Bodankin, a manager at the site.

Speaking with Channel 10 television, Bodankin said the suspect had entered the offices to fix an electrical problem, only to open fire at a secretary and senior manager sitting nearby.

A wave of Palestinian attacks against Israelis broke out in 2015, but they have since become sporadic.

Last month, a Palestinian teenager stabbed an Israeli to death at a junction at the entrance to a large bloc of Israeli settlements in the West Bank near Jerusalem.

A number of attacks have occurred at that location, the Gush Etzion Junction. Israel settlements are considered illegal under international law and major stumbling blocks to peace as they are built on land the Palestinians see as part of their future state.

Israeli leaders blame Palestinian violence, "incitement" and intransigence for the lack of progress in peace efforts.