An Israeli soldier died after being shot by a suspected Palestinian gunman in the southern West Bank city of Hebron, officials said, just two days after another soldier was killed by a Palestinian.
Their deaths sparked questions on the fate of peace talks, which were relaunched last month after a three-year hiatus, with a senior Israeli minister calling on the government to reconsider its involvement in the negotiations.
Condemning both attacks, the United States said such incidents "undermine efforts to establish the positive atmosphere the parties need to progress in peace negotiation."
"We call on all parties to join in condemning these attacks," said State Department spokesperson Jen Psaki.
Earlier Sunday, a statement from the Israeli military said "an IDF [Israel Defence Forces] soldier was killed by gunfire fired this evening at an army force in Hebron."
"The soldier was taken to a hospital in an intensive care unit where he died of his wounds," it said, identifying him as 20-year-old Sergeant Gabriel Koby from Tirat Hacarmel in northern Israel.
Israeli police had earlier said the soldier had been shot, "probably by terrorists," although the gunman had fled the scene, sparking a massive manhunt.
The army said the soldier was involved in "defending the Jewish neighbourhood of Hebron," where around 11,000 Israelis were expected to visit over the week-long Jewish holiday of Sukkot, or the Feast of Tabernacles, which began on Thursday.
The shooting took place close to the volatile Cave of the Patriarchs, which is considered holy to both Jews and Muslims.
The army locked down the city with roadblocks "in order to prevent the perpetrators from fleeing the city," the statement said.
Shortly before the incident, witnesses said there were clashes in the city centre between stone-throwers and Israeli forces, with one Palestinian wounded by rubber bullets.
Army spokesman Lieutenant Colonel Peter Lerner said the IDF would "employ the necessary means, operational and intelligence, to apprehend those responsible for this deadly attack."
Following the attack, Israeli Prime Minister Benjamin Netanyahu ordered the resettlement of the disputed Machpela house, a Hebron structure near the Cave of the Patriarchs from which he had removed 15 Jewish settlers last year.
"Whoever tries to forcibly remove us from the city of our patriarchs will achieve the opposite," he said in a statement.
"We will continue to fight terror and strike at its perpetrators with one hand, while strengthening the settlements with the other."
Six families had claimed to have bought one floor of the building in Hebron from its Palestinian owners, and lived there for a week before they were removed in April 2012 after the Israeli Defence Ministry said they had not obtained the necessary military permits for the purchase.
Sunday's fatal shooting took place a day after Israeli troops found the body of another soldier killed by a Palestinian.
Senior cabinet minister Naftali Bennett said the two attacks should push Israel to reconsider its involvement in peace talks with the Palestinians.
"Under the auspices of negotiation celebrations, Sukkot has turned into a festival of bloodshed and harm to Israeli soldiers," he said in a letter sent to Netanyahu.
"There is no doubt that there have been unfortunate developments since the start of the negotiations which require the government to reconsider its path," he wrote.
On Saturday, Israel discovered the body of Tomer Hazan, a 20-year-old soldier who had been lured to a village in the northern West Bank on Friday and killed by a Palestinian man with whom he had worked in a seaside town near Tel Aviv.
He was buried on Sunday in a military cemetery in the town of Holon.
