Palestinians from a "Hamas military network" that allegedly killed an Israeli in the occupied West Bank last month have been arrested, the Shin Bet internal security service said Sunday.

It named seven Palestinians suspected of organising and carrying out the June 29 West Bank shooting in which Malachi Rosenfeld was killed and three others in a car with him were wounded.

Four suspects were being held by Israel, while Ahmad Najjar, a Hamas militant freed in a 2011 prisoner swap for Israeli soldier Gilad Shalit, orchestrated and funded the attack from Jordan where he still is, a Shin Bet statement said.

Two more suspects, including Maath Hammad who allegedly pulled the trigger, were being held by the Palestinian Authority but questioned by the Shin Bet, it said.

Six members of the group were from the town of Silwad northeast of Ramallah. The seventh, the father-in-law of one of the suspects and not identified as a Hamas member, lives in nearby Kusra, the agency said.

Rosenfeld, 25, was shot while returning from a basketball game to the Kochav Hashahar settlement where he lived.

Shin Bet said the same group of suspects also shot at an ambulance and other Israeli vehicles two days earlier without causing any casualties, and had also planned another attack that did not take place.

Rosenfeld's killing took place during the holy Muslim month of Ramadan, which saw an increase in Palestinian violence in the West Bank and east Jerusalem.

Another Israeli, Danny Gonen, was shot dead in the West Bank on June 19.

The Shin Bet said the suspect in that case, whose arrest was announced last week, belonged to an armed group linked to Fatah, Palestinian president Mahmud Abbas's party.