Ban called on the perpetrators of what he called a "terrorist act" to face justice, and expressed condolences for the family of the dead baby, Ali Saad Dawabsha.
"The Secretary-General strongly condemns today's murder of a Palestinian child in the West Bank and calls for the perpetrators of this terrorist act to be promptly brought to justice," a spokesperson for Ban said.
"He expresses his deepest condolences to the family of Ali Dawabsha, who were themselves severely injured in the arson attack."
The Israeli military and army radio said a total of two homes had been torched by two masked men, with the child killed and four family members wounded, including the baby's parents and four-year-old brother.
The attack added to tensions between Israelis and Palestinians, sparking protests by hundreds of people and sporadic clashes, while Prime Minister Benjamin Netanyahu made a rare call to Palestinian president Mahmud Abbas in a bid to avoid further escalation.
Ban said he "urges both sides to take bold steps to return to the path of peace."
"The absence of a political process and Israel's illegal settlement policy, as well as the harsh and unnecessary practice of demolishing Palestinian houses, have given rise to violent extremism on both sides.
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