"In accordance with situation assessments following yesterday's shooting attack in Beit El, security measures have been taken in the area and only residents of Ramallah are allowed to enter the city," a military spokeswoman said.
The measure applied to foreigners as well, she said.
The spokeswoman said a decision on when to lift the measure would depend on security assessments.
A Palestinian who had worked as a guard for the attorney general's office in Ramallah opened fire at a checkpoint outside the city on Sunday, wounding three Israeli soldiers before being shot dead.
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The same checkpoint, regularly used by diplomats, journalists and humanitarian workers, was closed on Monday morning, an AFP journalist reported, as were other entrances in the area.
Vehicles were being allowed to enter through at least one road after being searched, with a long line of cars waiting to pass through.
A large number of Palestinians, aid workers and diplomats commute to Ramallah for work on a daily basis.
A wave of Palestinian knife, gun and car-ramming attacks erupted in October. Most of the attacks have been stabbings, although there have also been occasional shootings.
The violence has killed 25 Israelis, as well as an American and an Eritrean, according to an AFP count.
At the same time, 161 Palestinians have been killed by Israeli forces, most while carrying out attacks but others during clashes and demonstrations.