HEBRON  - Israel's forces fired rubber bullets at stone-throwing Palestinians in clashes in the southern West Bank city of Hebron Monday, as troops hunted for the suspected killer of an Israeli soldier.

The security forces also fired stun grenades, an AFP correspondent said, and Palestinian youths threw several petrol bombs as tension flared in the aftermath of both Sunday's killing and the death of another Israeli soldier in a separate incident just days earlier.

The killings have cast a pall over peace talks relaunched last month after a three-year hiatus, with Israeli ministers calling on the government to reconsider its decision to negotiate with the Palestinians.

The United States condemned both attacks, which it said "undermine efforts to establish the positive atmosphere the parties need to progress in peace negotiation."

Israel's army said Sunday that 20-year-old Sergeant Gabriel Koby died in hospital after sustaining gunshot wounds in Hebron.

Israeli police said earlier the soldier had been shot, "probably by terrorists," although the gunman had fled the scene.

A military spokeswoman told AFP on Monday that most of the roadblocks used to seal off the city the previous night were removed by morning and the army was searching in a "more specific" manner. The army had apprehended two Palestinians for holding hunting rifles, but that they were not connected to Sunday's incident.

The shooting took place close to the volatile Cave of the Patriarchs -- sacred to both Jews and Muslims -- during the week-long Jewish holiday of Sukkot, which began on Thursday and has seen thousands of Jewish visitors to the biblical city.

Following the attack, Israeli Prime Minister Benjamin Netanyahu ordered the resettlement of the disputed Machpela house, a Hebron structure near the Cave of the Patriarchs from which he had removed 15 Jewish settlers last year.

"Whoever tries to uproot us from the city of our patriarchs will achieve the opposite," he said in a statement.

"We will continue to fight terror and strike at its perpetrators with one hand, while strengthening the settlements with the other."

Palestinian foreign minister Riyad al-Malki on Monday accused Israel of unfairly "holding the Palestinian leadership responsible for what happens in the West Bank," in an interview with Voice of Palestine.

The settlers, who claimed to have bought the Hebron building from its Palestinian owners, inhabited the structure briefly before being removed in April 2012, with the defence ministry saying they did not have the necessary permits to finalise the purchase.

Noam Arnon, spokesman for the Jewish settlement in Hebron, told AFP a military court had recently ruled the purchase legal and said all that was needed to finalise the deal was the approval of Defence Minister Moshe Yaalon.

But an official involved in the process told AFP the purchase was still facing "legal bureaucracy" issues, and would not say when these might be resolved.

On Saturday, Israel discovered the body of Tomer Hazan, a 20-year-old soldier who had been lured to a village in the northern West Bank on Friday and killed by a Palestinian man with whom he had worked in a seaside town near Tel Aviv.

Army spokesman Brigadier General Yoav Mordechai ruled out a link between the two killings and rebuffed suggestions they indicated a deterioration in Israel's security situation.

"We see these as isolated incidents," Mordechai said in a statement, "not as a new trend."

Calls for Israel to reconsider peace talks

Senior cabinet minister Naftali Bennett said the two attacks should push Israel to reconsider its involvement in peace talks with the Palestinians.

"Under the auspices of negotiation celebrations, Sukkot has turned into a festival of bloodshed and harm to Israeli soldiers," he said in a letter sent to Netanyahu.

"There is no doubt that there have been unfortunate developments since the start of the negotiations, which require the government to reconsider its path," he wrote.

And Transportation Minister Israel Katz of Netanyahu's Likud party slammed the Palestinian Authority for not condemning the two killings and called for a halt to the planned release of a second batch of Palestinian prisoners, after Israel set 26 free ahead of talks last month.

"Another group (of Palestinian prisoners) is about to be released," he said in a statement. "Now is the time to stop."