Israeli forces have killed a 21-year-old Palestinian during a raid in al-Jalazon refugee camp, on the edge of Ramallah, as the massive manhunt following the alleged kidnapping of three Israeli teens.

Ahmed Sabarin was shot in the chest during house-to-house searches in the camp and died of wounds at the Palestine Medical Centre. Another man was wounded in the assault and at least five others from the camp were arrested.

It is unclear whether the Israeli Defense Forces (IDF) had been trying to arrest the men.

"Palestinians hurled rocks at security forces who responded with live fire. Scans of the area revealed ammunition and weaponry. Regarding the reports of a Palestinian killed we are still looking into them," said an IDF statement.

IDF troops have arrested 150 Palestinians, including leading Hamas members such as parliament speaker Abdel Aziz Dweik and Hamas founder Hassan Yousef and former ministers.

Israel has accused Hamas of abducting the teens, who went missing after going hitchhiking in the West Bank.

"Those who carried out the kidnapping of our youngsters are Hamas people," Israeli Prime Minister Benjamin Netanyahu said on Sunday. But Hamas called Netanyahu's comments "silly" and said the arrests were "aimed at breaking the will of the Hamas movement in the West Bank.

Israeli forces are also preparing a siege of the troubled city of Hebron as part of the manhunt. IDF troops have loaded concrete barricades on trucks and spread out bulldozers in the city, Ynet news reported.

The main entrances of the city were also blocked by the IDF with concrete blocks.

The students - 16-year-olds Naftali Frenkel and Gilad Shaar and 19-year-old Eyal Yifrach - disappeared near an Israeli settlement in the West Bank on their way back from lessons.