Palestinian police officers on patrol in the West Bank city of Tulkarm said they killed a Palestinian gunman in the early hours of Thursday.
The police said the officers came under fire amid "lawlessness in the city." The militants opened fire at a police station, prompting officers to return fire.
In many Palestinian cities in the occupied West Bank, the Palestinian Authority is responsible for security. Although security co-operation between Israel and the authority has been officially broken off several times, it continues behind the scenes.
The militant who died was said to be member of the Islamic Jihad terrorist organization.
Islamic Jihad condemned the incident as an attempt by the Palestinian Authority to take action against the organization's fighters in Tulkarm.
According to media reports, Palestinian militants fired on the headquarters of the Palestinian Authority in Tulkarm after the deadly incident. However, no one was injured.
Fourteen people were killed in an Israeli military operation in the refugee neighbourhood of Nur Shams in Tulkarm last month, the Ministry of Health in Ramallah said. According to the Israeli army, at least 10 of them were gunmen. Eight wanted suspects were arrested, explosive devices were defused and numerous buildings were searched.
In addition, an explosives workshop was destroyed and numerous weapons were confiscated, including pistols and M16 assault rifles.
Since the beginning of the Gaza war almost seven months ago, the security situation in the West Bank has deteriorated significantly, but intra-Palestinian fighting is rare.