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The victim was identified as US-born Ari Fuld, 45.

The stabbing attack took place at a mall in the Gush Etzion junction in the occupied West Bank. Fuld was a resident of the nearby Efrat settlement.

He was known for his hard-line nationalist ideology and strong support for the Israeli military.

The alleged assailant, a 17-year-old Palestinian from the town of Yatta, was shot at the scene then detained by Israeli forces.

Israel's army set up roadblocks in Gush Etzion following the incident, while soldiers raided the hometown of the teenager.

More than 600,000 Israeli Jews live in settlements illegal under international law in the occupied West Bank and East Jerusalem, territories seized during the 1967 war. 

Israeli armed forces have shot and killed at least 180 Palestinians in 2018, the majority during protests in the Gaza Strip.

Lone Palestinian attackers have carried out multiple deadly stabbings and car-rammings against Israelis in recent years.