At least one Israeli was killed and two others wounded near a West Bank settlement on Sunday in an attack thought to have been carried out by a Palestinian, a spokesperson for the Israeli Army said.

The assailant who “appears to be Palestinian” attacked a soldier seemingly with a knife, near the settlement Ariel and took his firearm, spokesman Lieutenant Colonel Jonathan Conricus said.

The attacker then opened fire at three cars that were passing by, wounding one civilian, according to Conricus, who added that the aggressor did not stop until he shot the third car.

"The terrorist took the vehicle and used it to drive," heading to Gitai Avishar junction and fired at and wounded another soldier, according to the spokesperson.

The suspect ran away toward a Palestinian villa, and "a manhunt is ongoing," Conricus said.

Following the attack, security measures have been reinforced by Israeli forces in West Bank and they are highly vigilant for the possibility of another attack inspired by this one, Conricus added.

It was not immediately clear which of the victims of the attack had died.

The spokesperson declined to confirm whether the deceased was one of the soldiers as local media had reported.

Magen David Adom, the local equivalent of the Red Cross, has attended the injured and carried them to a hospital nearby Tel Aviv, it said.

"We are in pursuit of the terrorists at two points in the Ariel area," Israel’s Prime Minister Benjamin Netanyahu said at the beginning of his weekly cabinet meeting. "I offer my support to the soldiers of the IDF, the ISA and the security forces who are pursuing the terrorists,” he added.

“I am certain that they will apprehend them and we will deal with them to the fullest extent of the law as we have done in all of the recent incidents," he said.

The attack comes amid increasing tension between Israel and Palestinians.

The Israeli military said it attacked more than 100 positions of the Palestinian Islamist movement Hamas early Friday in retaliation for rockets allegedly fired from Gaza.

The army claimed the movement fired four rockets from Gaza towards Tel Aviv, although both Hamas and the Islamic Jihad movement denied responsibility.