The man was shot during the protests which are held weekly near the village of Nabi Saleh, north of Ramallah, and later died in a nearby hospital, the ministry said in a statement.
The dead man was named as Saba' Nidal Obaid, 20.
The Israeli army said in a statement to AFP it was "aware of reports" that a protester had been killed but could not confirm it.
"A violent riot involving dozens of Palestinians hurling rocks at (Israeli army) forces broke out earlier today," a spokeswoman said.
"Dispersal means," including firing live ammunition, were used "in response to that imminent threat".
A wave of unrest which erupted in October 2015 has claimed the lives of 263 Palestinians, 41 Israelis, two Americans, one Jordanian, an Eritrean, a Sudanese and a Briton, according to an AFP count.