The Israeli military said on Saturday that it received a report of a "shooting incident" in Hawara, a town in the occupied West Bank. Israeli media said two Israelis were wounded.
The report came amid fears of an escalation during the holy Muslim month of Ramadan that coincides with the Jewish holiday of Passover.
Hawara was attacked last month by settlers in what was described by an Israeli commander as a "pogrom".
The rampage, which followed the killing of two other settlers by a suspected Palestinian militant, saw homes and vehicles torched, with one Palestinian killed in a nearby town.
So far this year, 90 Palestinians have been killed by Israeli forces and settlers.
(Reuters)