The Palestinian Authority's education ministry has accused Israeli settlers in the West Bank of killing an activist linked to an Oscar-winning film, while Israeli police said they were investigating the incident.

The ministry said on social media that Awdah Muhammad Hathaleen "was shot dead by settlers... during their attack on the village of Umm al-Khair" near Hebron, in the south of the occupied territory.

The Israeli police earlier said it was investigating an "incident near Carmel," a settlement neighbouring Umm al-Khair.

"An Israeli citizen was detained at the scene and then arrested by police for questioning," a police statement said.

"Four Palestinians were arrested by IDF [Israeli military] soldiers in connection with the incident, along with two foreign tourists who were at the scene."

"Following the incident, the death of a Palestinian was confirmed; his exact involvement in the incident is being verified," the police added.

Awdah Hathaleen was a resident of Masafer Yatta, a string of hamlets located on the hills south of Hebron, which have been declared a military zone by Israel.

Their efforts to prevent Israeli forces from destroying their homes was the subject of "No Other Land", which won Best Documentary at the Oscars in March.

Its Israeli co-director, Yuval Abraham, posted a video on Instagram showing a man with a gun in his hand arguing with a group of people, while shouts can be heard in Hebrew and Arabic.

"An Israeli settler just shot [Awdah Hathaleen] in the lungs, a remarkable activist who helped us film 'No Other Land' in Masafer Yatta," Abraham wrote.

About three million Palestinians live in the West Bank alongside nearly half a million Israelis living in settlements, which are considered illegal under international law. (AFP)