Despite ceasefire efforts, the death toll continues to rise
Military sources in Israel said four figures were spotted overnight in the area and shot. The army said they were probably armed.
The latest incident comes as US peace envoy Anthony Zinni is renewing attempts to negotiate a ceasefire in the Middle East.
He has scheduled another round of talks between Palestinian and Israeli officials to try to come closer to a solution, after talks on Friday ended without agreement.
Correspondents say an agreement at Sunday's meeting may open the way for Palestinian leader Yasser Arafat to hold talks with US Vice-President Dick Cheney.
An Israeli woman died early on Sunday, after suspected Palestinian gunmen shot at her car near the Jewish settlement of Ateret, north of Ramallah.
A short time later, a Palestinian policeman was killed in an exchange of fire at a Palestinian checkpoint in nearby Dir al-Sudan village, according to Palestinian sources.
The Israeli army said its soldiers came under fire from the checkpoint while searching for the killers of the Israeli woman.
At least six Palestinians were killed in continuing violence on Saturday.
The Israeli army says two were shot and killed as they were trying to attack a military post in the north of the Gaza Strip.
Beirut summit
Israeli Foreign Minister Shimon Peres says that despite the violence, Mr Arafat should not be prevented from attending the Arab League summit in Lebanon.
The Israeli Prime Minister Ariel Sharon has said Mr Arafat will only be allowed to attend if he enforces a complete end to Palestinian attacks on Israelis.
Mr Peres - who wants the Israeli coalition government to ease its tough stance towards the Palestinians - warned that Mr Arafat's failure to arrive at the meeting in Beirut would make him a hero in the Arab world.
Mr Arafat's aides have said the Palestinian leader intends to go to the summit, where Saudi proposals for a Middle East peace initiative will be up for discussion.
The Saudi Crown Prince, Abdullah bin Abdul Aziz, said on Sunday that his proposals would test Israel's willingness for peace.
He said the plan would show that the Arab world wanted to live in peace with Israel.
Pressure on Arafat
US Vice-President Dick Cheney said on Sunday it was unlikely that he would meet Mr Arafat before the summit in Beirut.
Mr Cheney did not rule out a future meeting with the Palestinian leader but said Mr Arafat had not done enough to halt attacks against Israel.
"I will not hold the meeting unless we see those circumstances that we specified. To date we haven't seen them. But if we do then I'm prepared to go forward with the meeting," he told an American network.
The European Union foreign policy chief Javier Solana on Saturday expressed hope that a ceasefire could be achieved within the next few days.
Mr Solana, who travels to the Middle East on Tuesday, is to have talks with regional leaders as part of European efforts to stop the violence.