An Israeli soldier killed a Jewish settler rabbi in the occupied West Bank on Friday after mistaking him for a Palestinian militant as he drove to dawn prayers, the army and settler leaders said.

Troops set up a checkpoint near Beit Hagai settlement after receiving reports of a car "driving suspiciously," and one of them opened fire on the speeding vehicle after it failed to heed orders to halt, the army said in a statement.

The soldier "felt his life was in danger," it said.

Palestinians fighting for statehood in the West Bank have used vehicles for attacks on Israeli soldiers and settlers.

Two other people in the car were wounded in the shooting, a military spokesman said. An Israeli soldier was also injured when he was accidentally hit by a truck passing the scene.

Mansbach was among the founders of nearby Ottniel settlement, its spokesman, Yehuda Glick, told Israel's Army Radio. Glick said the rabbi and the two others in his car were driving to early morning prayers in Hebron, revered by Jews and Muslims as the burial site of biblical patriarchs.

Some 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem, which Israel has occupied since the 1967 Middle East war. Many settlers practice Orthodox Judaism, Reuters reported.