The person who was killed at the camp located in the northern West Bank was identified as 19-year-old Mohammed Abu Khalifa, the sources said.
The shooting occurred after an incursion into the camp by Israeli forces sparked clashes with young Palestinians, Palestinian security officials said.
An Israeli army spokeswoman said the soldiers had opened fire after entering the camp and being attacked with explosive devices.
"Faced with immediate danger, the soldiers fired at the main instigators of the violence," she told AFP.
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None of the soldiers were hurt, she added.
A wave of Palestinian attacks that erupted in October 2015 has resulted in the deaths of 252 Palestinians, 40 Israelis, two Americans, a Jordanian, an Eritrean and a Sudanese.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, according to Israeli authorities, with others killed during protests, in clashes or air raids on Gaza.
Israel blames incitement by Palestinian leaders and media as a leading cause of the violence.
Israeli authorities have confiscated the bodies of killed Palestinians since the violence began, often keeping them for many months as a means of deterrence and to prevent clashes during funerals.
