Basel Wajeeh al-Muhtasib, 28, "died as a result of being shot by occupation (Israeli army) bullets" as he drove through Bayt Inun junction, north of the city of Hebron, Wafa reported.
Israeli security forces cordoned off the area preventing Muhtasib from being taken to hospital, the report said.
The army said troops had opened fire on the vehicle after the driver attempted to carry out a "car ramming attack". It did not give further details.
Even before the war between Israel and Palestinian militant group Hamas broke out on October 7, violence was on the increase across the West Bank.
Since the war in Gaza started, the death toll has risen sharply, with more than 300 Palestinians killed by Israeli troops or settlers in the West Bank, according to the Ramallah-based Palestinian health ministry.
The United States announced earlier this month that it would refuse visas for extremist settlers implicated in recent violence against Palestinians in the territory.
Israel has occupied the West Bank since the Six-Day War of 1967 and, excluding annexed east Jerusalem, is now home to around 490,000 Israelis who live in settlements considered illegal under international law.
