Palestinian officials said Mr Minya's body was found near Itamar
A Palestinian shepherd has been shot dead near the city of Nablus in the occupied West Bank.
Palestinian officials accused Jewish settlers of pursuing Yahya Minya, 18, from the village of Aqraba, and shooting him a number of times.
Israeli police said they were looking into the incident, which comes amid a rise violence by hardline settlers.
Israel's defence minister later called for a tougher stance to be taken against people who attack Palestinians.
Speaking at Sunday's cabinet meeting in Jerusalem, Ehud Barak said such offenders were rarely prosecuted for their actions.
The majority of those who were brought before legal authorities were only given light penalties, he added.
Prime Minister Ehud Olmert meanwhile said an ultra-nationalist "underground" was threatening his country's democracy after a well-known Israeli critic of Jewish settlements in the West Bank, Zeev Sternhell, was slightly wounded in a bomb attack near his home on Wednesday.
"An evil wind of extremism, of hate, of maliciousness, of violence, of losing control, of lawbreaking, of contempt for the institutions of state, is passing though certain sections of the Israeli public," Mr Olmert told the cabinet.
Earlier this month, an attack by dozens of settlers on the village of Asira al-Qabaliya, which left several Palestinians injured, was described by Mr Olmert as a "pogrom" against non-Jewish residents.
It was filmed by human rights groups and came after an intruder stabbed and wounded a child at the nearby Yitzhar settlement.
About 450,000 Jews live in the West Bank and East Jerusalem in settlements considered illegal under international law, although Israel disputes this.
The BBC's Aleem Maqbool in Ramallah says their continued presence is one of the major sticking points in the peace talks between Israel and the Palestinian Authority.
But as those talks continue, some settlers are worried that they will be made to leave, if a peace deal is struck, our correspondent says.
The recent violence is seen by some as a reminder to the Israeli government that it will face fierce resistance if it looks to evacuate Jewish settlements in the West Bank, he adds.