A soldier from the Kfir brigade who was at a checkpoint felt his life to be in danger and opened fire, critically injuring the driver, an army spokeswoman added. A passenger who attempted to flee the scene was shot in the leg and lightly injured.
Both injured men were rushed by the army to an Israeli hospital for treatment.
The vehicle was found to contain several Palestinians who attempted to enter Israel illegally. They were detained for questioning.
An Israeli civilian who was at the checkpoint at the time was lightly injured after being hit by the vehicle.