Amjad Nashaat Abu Alia, 16, "died of critical wounds sustained by live bullets in the chest", during clashes near the village of Al-Mughayer, close to Ramallah, the ministry said in a statement.
An AFP photographer at the scene reported that 300 to 400 Palestinians had gathered for a protest march against Israeli settlement expansion in the area.
Clashes erupted when Israeli settlers and Palestinians began throwing rocks at each other.
The Israeli occupation army said it had intervened after "hundreds of Palestinians instigated a violent riot".
The army and border police responded with "riot dispersal means and live fire," the military statement to AFP added.
It came after two Palestinians were killed during an overnight raid by the Israeli military in Nablus early on Sunday, in what the army described as a shootout with gunmen.
At least 53 Palestinians have been killed since late March, mostly in the West Bank, among them suspected militants and also non-combatants, including Al Jazeera journalist Shireen Abu Akleh, a Palestinian-American dual national, who was covering an Israeli raid in Jenin.