The Palestinian health ministry identified the woman as Ghafran Warasna and said she had been shot in the chest. The Palestine Prisoner Club said the 31-year-old was released from Israeli prison in April after serving three months.
Israeli-Palestinian violence has intensified in recent weeks with near-daily arrests by the Israeli military amid a series of attacks by Palestinians that have killed at least 19 people.
Tensions have risen after the murder of Palestinian-American journalist Shireen Abu Akleh, who worked for Al Jazeera, and an Israeli ultra-nationalist march through a Palestinian neighborhood in East Jerusalem.
At least 35 Palestinians have been killed by Israeli forces in recent weeks. Many of them carried out attacks or were involved in clashes with Israeli forces in the West Bank. But the dead also included Abu Akleh, an unarmed woman and two apparent bystanders.
Palestinians have carried out dozens of stabbing attacks in recent years, but Israel has also been criticized by human rights groups for saying that security forces sometimes use deadly force rather than arrest suspected attackers.
Israel captured the West Bank in the 1967 Middle East War and the Palestinians want it to become the most important part of their future state. Nearly 3 million Palestinians live under Israeli military rule in the area, alongside a growing population of nearly 500,000 Jewish settlers who hold Israeli citizenship. The last serious peace talks broke down more than a decade ago.