Laith Abu Naim, 16, was shot in the head as soldiers stormed the village of Al-Mugheer, north of Ramallah, according to a ministry statement.
Hundreds of residents marched
through Al-Mugheer condemning Abu Naim's death and chanting, "We want to live in freedom."
A spokeswoman for the Israeli military said, "Violent riots are taking place in this area and burning tyres and stones were thrown at the soldiers."
She said she was unable to confirm that any Palestinians had been hit by gunfire.
Abu Naim's death comes amid growing tensions after US President Donald Trump's decision to recognise Jerusalem as the capital of Israel.
Nineteen Palestinians have been killed since Trump's announcement, with the majority of the deaths taking place during demonstrations by Palestinians.
US Vice President Mike Pence confirmed earlier in January that the United States will move its embassy to Jerusalem before the end of 2019.
The announcement came during an address to the Israeli parliament, which saw Palestinian-Israeli MPs escorted out of the Knesset, after protesting Pence's visit to Jerusalem.
"In the weeks ahead, our administration will advance its plan to open the United States embassy in Jerusalem – and that United States embassy will open before the end of next year," Pence said.
"Jerusalem is Israel’s capital – and, as such, President Trump has directed the State Department to immediately begin preparations to move the United States embassy from Tel Aviv to Jerusalem."
Saeb Erekat, secretary-general of the Palestine Liberation Organisation, denounced Pence's speech as "messianic" and a "gift to extremists".
Jordan's King Abdullah also renewed concerns over the US decision to recognise Jerusalem as Israel's capital, during high-level talks with Pence on Sunday.
Abdullah emphasised to Pence that East Jerusalem had to be the capital of a future Palestinian state and that the two-state solution was the only path to peace between Israel and Palestine.
"The US decision on Jerusalem ... does not come as a result of a comprehensive settlement of the Palestinian-Israeli conflict," the monarch told Pence at the start of the talks in the royal palace in Amman.
Israel occupied the West Bank, including East Jerusalem, during the 1967 war. Pence was in Amman on the second leg of a three-country tour that concluded in Israel.