The shootout came a day after a cease-fire ended three days of Israeli deadly airstrikes against the Palestinians the besieged Gaza Strip.

In a separate incident in the occupied West Bank city of Hebron, the Palestinian Health Ministry said a 17-year-old was killed by Israeli fire.

The Israeli occupation army said forces were responding with live fire, among other means, to a protest.

Israeli police said security forces encircled the home of Ibrahim al-Nabulsi, who they say was wanted for a string of shootings in the occupied West Bank earlier this year. They confirmed that al-Nabulsi and another Palestinian militant were killed in a shootout at the scene, and that troops found arms and explosives in his home.

The Israeli occupation army said that troops came under attack from Palestinians throwing rocks, and that soldiers responded with live fire. It confirmed Palestinians were shot, but did not elaborate on their condition.

The Palestinian Health Ministry said three people were killed _ al-Nabulsi, Islam Sabouh and Hussein Jamal Taha - and at least 40 were wounded.

The armed wing of Palestinian President Mahmoud Abbas's Fatah party, the Al-Aqsa Martyr's Brigade, later claimed the three as its members and vowed retaliation. The Fatah party said the organization ``mourns its martyred sons'' and said the three had ``sacrificed their lives in defense of our great people and their right to freedom and independence.''