The incident happened near a shopping mall south of the occupied holy city of Jerusalem al-Quds on Sunday.
The Palestinian was identified as 17-year-old Khalil Yusef Ali Jabarin from the village of Yatta near the city of al-Khalil (Hebron) in the occupied West Bank, Presstv Reported.
“The attacker is in moderate condition after being shot and neutralized by a civilian who was in the mall,” The Jerusalem Post reported.
The daily alleged that Jabarin had inflicted “critical” injury on a 40-year-old Israeli.
Also on Sunday, a 16-year-old Palestinian youth, named as Abdul-Salam Abu Kashef, died in the besieged Gaza Strip of the injuries he had received from live Israeli fire earlier.
Tensions have been running high near Gaza’s fence since March 30, which marked the start of a series of protests dubbed “The Great March of Return.”
The protests have centered on the Palestinian right of return for those driven out of their homeland after the creation of Israel.
Gaza’s Health Ministry said Abu Kashef had been wounded during the protests on September 3.
The fatality brings the number of Gazans killed by the Israeli military during the protests to 188.