“A terrorist who arrived at the rear gate of Har Adar along with Palestinian labourers entering the settlement…. pulled out a weapon and opened fire at the force at the site,” police said.
“Three Israelis were killed in the attack, another was wounded and the terrorist was neutralised.” Police later said the Palestinian had died of his wounds.
The shooter was identified by police as a 37-year-old man from Beit Surik, a Palestinian village near Har Adar, who carried a work permit for the settlement.
As he approached the checkpoint at the entrance to Har Adar, he aroused the suspicion of security forces, who ordered him to halt, police said.
He then pulled out a pistol and opened fire on border police and civilian security guards, before being shot. The wounded Israeli was admitted to Hadassah hospital in Jerusalem in serious condition, the hospital said.
The incident, at a settlement northwest of Jerusalem that lies near several Palestinian villages, comes nearly two years after a wave of unrest broke out.
The violence had greatly subsided in recent months.
Since October 2015, the unrest has killed at least 295 Palestinians or Arab Israelis, 50 Israelis, two Americans, two Jordanians, an Eritrean, a Sudanese and a Briton, according to an AFP toll.
Israeli authorities say that most of the Palestinians killed were carrying out a knife, gun or car-ramming attacks.
Others were shot dead in protests and clashes, while some were killed in Israeli air strikes on the Gaza Strip.