The Israeli militant alleged that they were seeking to arrest the man after he allegedly shot at them in the occupied West Bank.
Following the fatal incidents, the soldiers sealed Al-Aqsa Mosque, and canceled Friday prayers, before preventing all Muslim worshipers from entering or leaving the mosque courtyards.
A Palestinian gunman who was killed by Israeli security forces in an overnight raid in the West Bank was a former member of the Palestinian security forces turned arms dealer, the Shin Bet said on Sunday.
No Israeli casualties were reported, according to the statement.
The army claims that the Palestinians was killed after he "attempted to open fire on the soldiers with his homemade weapon", and that another Palestinian, who was with him, was taken prisoner. "In response to the immediate threat forces fired towards the attacker resulting in his death", it said.
One Palestinian was lightly wounded in the shooting.
In a separate incident, gunshots hit a military post near Nabi Salah.
The rejection of a love between a young Arab couple and their desire to be married, by their respective families in the Palestinian Authority, became the latest excuse for terror against Jews this past Saturday, according to Israel's Security Agency, the Shin Bet domestic intelligence service.
The sources furthermore claimed that the man was responsible for two shootings in Ramallah area on Saturday, first near the Atarot settlement and then on the other military barracks in the area of Nabi Saleh. Security forces at the scene of Friday's dramatic attack killed the three attackers.