Israelis and Palestinians clashed near the West Bank settlement of Itamar on Saturday but the two sides gave conflicting accounts of the incident.
Palestinian security officials said that settlers attacked Palestinian shepherds from the neighbouring village of Yanun, south of Nablus, and stabbed five of their sheep to death.
They said that Israeli troops who arrived at the scene joined the settlers in opening rifle fire on the Palestinians, wounding one seriously and two moderately.
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An army spokeswoman said no Palestinian was wounded by live fire, adding that soldiers employed "riot dispersal means" to separate the sides, usually a reference to tear gas or rubber bullets.
"There was a clash between Israeli civilians and many Palestinians that broke out and included mutual rock-throwing," she told AFP.
"We know that during this confrontation one Israeli civilian and one Palestinian were injured by rocks."
The UN Human Rights Council has set up a panel to probe Jewish settlements in the occupied Palestinian territories.
Israel, which severed ties with the council in March, said on Friday that it would bar the panel's experts from access to the sites of inquiry.