The army "thwarted an attack in Hebron when a Palestinian attempted to stab a soldier. Responding to imminent danger, IDF (army) forces on site fired at the perpetrator," it said in a statement.
The army later confirmed the attacker, 19-year-old Saed al-Atrash from Hebron, had died on the way to hospital.
Police spokesman Micky Rosenfeld said on Twitter that the incident took place outside a shrine known to Jews as the Cave of the Patriarchs and to Muslims as the Ibrahimi Mosque.
A wave of attacks against Israelis since early October has left eight dead. One Israeli Jew and an Eritrean have also been killed after being mistaken for attackers.
Monday's incidents took the number of Palestinians killed in attempted attacks and clashes to 55. An Israeli Arab attacker has also been killed.
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