Ahmad Asaad, governor of the northern West Bank city of Tubas, told AFP that the strike hit nearby Tammun village, killing a 23-year-old man and two children, aged eight and 10, all from the same family.
The Palestinian foreign ministry in Ramallah condemned the deadly strike, accusing Israel of harming civilians "under the pretext" of fighting militants.
The Israeli military said the air force "struck a terrorist cell" in the Tammun area.
The Tubas governor said Israeli forces, which have operated in Tammun in recent days, took the bodies of the three Palestinians killed.
They later handed them back, the Red Crescent said.
The governor identified the dead as Adam Bsharat, 23, Hamza Bsharat, 10, and Reda Bsharat, eight.
He said they were killed in front of their house, which an AFP journalist said was damaged by shrapnel.
Relative Jalal Bsharat said they had been at home when "the Israeli occupation army targeted them".
He said the strike showed Palestinians are not safe, even in their own homes.'Ensure security'
By midday, hours after the strike, Israeli forces were no longer seen in Tammun, the AFP journalist said.
It was the second Israeli air strike to hit Tammun in as many days.
On Tuesday, the military said it killed two people in a strike on an "armed terrorist cell" that opened fire on Israeli forces who were conducting a raid in the village.
Tammun residents told AFP that Israeli forces had taken one of the bodies.
Israeli forces carry out frequent raids on Palestinian towns and villages in the West Bank, which Israel has occupied since 1967.
Violence in the territory has soared since the war in Gaza broke out on October 7, 2023.
On Monday, three Israelis were killed when gunmen opened fire on vehicles on a road in the northern West Bank, the army and emergency services said.
Israeli Defence Minister Israel Katz said he had ordered an "increase" in military activities to "ensure the security of (Israeli) settlements and settlers".
Katz said there were "growing efforts to promote Palestinian terrorism" and warned Israel would "continue to act with strength" against militants as well as "their handlers and those who shelter them".
Israeli troops or settlers have killed at least 825 Palestinians in the West Bank since the start of the Gaza war, according to the Palestinian health ministry.
Palestinian attacks in the territory have killed at least 28 Israelis over the same period, according to Israeli official figures.
