A Palestinian motorist rammed his car into a group of soldiers in the occupied West Bank on Saturday, the Israeli military said, wounding three before another opened fire at the driver who was, according to the Palestinian health ministry, killed.

A Palestinian official said the 23-year-old was a member of the Palestinian security forces.

In Jerusalem, a man detained by Israeli police near a flashpoint holy site grabbed an officer's gun and fired it, prompting the unit to shoot him dead, the force said, an account doubted by Arab leaders and probed by authorities.

The Jerusalem incident overnight at the edge of the Al Aqsa Mosque complex, an icon of Palestinian nationalism, came at a high point of Muslim attendance for the holy month of Ramadan amid heightened fears of an escalation in violence.

Israeli-Palestinian tensions are simmering after months of violence in areas of Jerusalem and the West Bank. Friction at Al Aqsa has set off violence in recent years.

However, the sacred site, known to Muslims as the Noble Sanctuary and to Jews as Temple Mount, remained relatively quiet on Saturday.

The slain man was identified as Mohammad Khaled al-Osaib, 26, a resident of the Bedouin town Hura in south Israel. Mansour Abbas, a lawmaker whose United Arab List party is popular there, said the man was a medical student. Abbas questioned the police account.

"All we demand is the truth," he said.

The Justice Ministry department for investigating police conduct is looking into the incident, a spokesperson said, adding that the procedure was not a formal investigation.

Asked if the Israeli unit's response was due to allegations of misconduct, she said: "There are such claims, and that's why we're looking into it."

Reuters could not immediately verify the police account. Police said the incident took place at a spot not covered by security cameras. Footage of similar incidents in the past has usually surfaced within a short time.

Police released CCTV footage showing a person they said was al-Osaib walking across the complex alone right before the incident, which a spokesperson said happened in "seconds," and denied reports he had intervened in an altercation with a female worshipper.

Israel's far-right National Security Minister Itamar Ben-Gvir said he backed the officers.