Shireen Abu Akleh, 51, a seasoned reporter with the Al Jazeera media house, was killed on Wednesday after Israeli troops exchanged fire with Palestinian militants in the West Bank city of Jenin.
The network says she was shot by Israeli troops. The IDF said they were investigating the incident.
Abu Akleh was reportedly shot in the head and taken to a local hospital where she was pronounced dead.
Al Jazeera interrupted its regular programing to report her death.
"We know all our reporters on the scene in Jenin were wearing flack jackets marked as Press," the network said.
"We condemn the terrible crime meant to prevent media outlets from their reporting," Al Jazeera said in a statement. "We hold the Israeli government and the occupation forces responsible for the murder of our colleague and demand that the international community condemn the killing of Shareen Abu Akleh."
Palestinian President Mahmoud Abbas also blamed Israel for the reporters' death.
One Palestinian official said Shireen Abu Akleh had been "assassinated" by Israeli forces while reporting on a raid in the city of Jenin, which has seen intensified army raids in recent weeks as violence has surged.
The Palestinian health ministry confirmed Abu Akleh's death and said a second reporter, Ali Samodi, had been wounded.
In a statement, the military said its troops had shot back after coming under "massive fire" in Jenin and that "there is a possibility, now being looked into, that reporters were hit - possibly by shoots fired by Palestinian gunmen".
This was the first reported military incursion into the camp in three weeks after they had entered the camp in search of suspected terror operatives.
Abu Akleh, a native of Jerusalem, had been covering Israel and the West Bank for Qatar based news organization for the past two decades and was a well known figure in the Arab speaking world.
The IDF said she may have been shot by the same gunmen who were targeting troops in the camp.
The military expressed its sadness over the incident.
"We call on Palestinians to join us in an investigation including by a coroner," the IDF said but added that thus far their offer has been refused.