Wednesday's (June 16) incident comes amid increased tensions after a Jewish nationalist march in Jerusalem on Tuesday (June 15) drew the launch of incendiary balloons across the Gaza border and retaliatory Israeli air strikes.
The military said the Palestinian woman "attempted to ram into a number of IDF (Israel Defence Forces) soldiers" near the Palestinian village of Hizma, northeast of Jerusalem.
"After the car-ramming attempt, the assailant exited her vehicle with a knife drawn ... The soldiers responded with fire towards the assailant and neutralized her," the military said in a written statement.
The Palestinian health ministry said the woman died of her injuries. There was no word of Israeli casualties. The West Bank has seen a rise of violent incidents in recent weeks.