Undercover border policemen killed Tanzim leader Muhammad Nimas on Tuesday afternoon, near Tulkarm.
Nimas was the head of the Tanzim in Seida. He spotted the Border Police troops ambushing his vehicle and drew his gun, leaving the car.
The soldiers responded with fire, killing the fugitive, according to reports. An additional gunman was arrested on the scene, and a third man who was in the vehicle was wounded when he tried to fire at the troops.
The two were arrested and taken for interrogation.
Two explosive devices were found in the vehicle.
The army had not yet confirmed the incident.