About 400,000 Israelis live in settlements in the West Bank, which Israel illegally occupied 50 years ago.
The Israeli army frequently carries out sweeping arrest campaigns across the occupied West Bank on the pretext of searching for "wanted" Palestinians.
The settler was driving in his auto when he was shot at from a close range, thought to be from a vehicle passing by.
"Hamas praises the killers and PA laws will provide them financial rewards".
Palestinian Foreign Minister Riyad Maliki criticized the USA government on Wednesday for "giving the greenlight" to Israel to do "whatever it wants with Palestinian land", in regards to Israeli announcements of plans to build over 1,000 new illegal settlement units in the occupied West Bank. "Look no further to why there is no peace".
"We stress the commitment of the Palestinian people to the prisoners and families of the prisoners".
Netanyahu later praised what he called Friedman's "unvarnished, straightforward" tweet. Here's the principle they are communicating to their people: "'Kill Israelis and get rich,"' he said to a gathering of foreign journalists. "Now, what kind of message does that send to impressionable Palestinian children?"
The U.N. Mideast peace envoy Nickolay Mladenov also condemned the killing. "This is not the path to peace!" he tweeted. Some 50 families now live in Havat Gilad.
Israeli officials strongly denounced the attack, including those calling for punitive measures against Palestinians, such as the demolition of the homes of the attackers.
Israel captured the West Bank in the 1967 Mideast war.
Israeli authorities were due to approve on Wednesday the construction of 1,285 housing units to be built in 2018 and advance planning for 2,500 others in about 20 different settlements, Lieberman said in a statement.
The soldiers also summoned for interrogation the head of ad-Dar Educational Center, Engineer Samer Sari Nusseibeh, and the head of the Education Department in East Jerusalem, Samir Jibril.