Israeli settlers rampaged through Palestinian towns in the occupied West Bank on Wednesday, torching buildings and cars.

Palestinian health officials said one Palestinian was shot dead during the rampage.

In Turmus Ayya, a prosperous town near the occupied West Bank city of Ramallah, footage showed cars ablaze, with thick clouds of black smoke swirling above and Palestinian youths throwing stones.

Overnight, residents of a number of other Palestinian towns also reported settler attacks as senior ministers in Prime Minister Benjamin Netanyahu's government called for a full-scale military operation across the West Bank.

Yaqoub Oweis, Chairman of the Village Council of Al-Lubban Al-Sharqeya near Ramallah, said Israeli soldiers and police stood by as a large group of settlers burned a petrol station, orchards, a cement factory and dozens of cars.

"The attack was unprecedented and abnormal," he said. "There was heavy gunfire but we couldn't distinguish whether it came from settlers or the soldiers because of the darkness." Attacks were also reported in other West Bank towns and villages.

The Israeli military and police did not immediately respond to requests for comment.

For over a year, the occupation army has been conducting regular sweeps of Palestinian towns and villages, arresting hundreds of Palestinians including minors.