Noa Lazar, a female soldier (18) succumbed to wounds sustained during the Saturday shooting attack on a Border Police checkpoint in north east Jerusalem.
The suspected gunman remains at large and a manhunt is underway to apprehend him. He was identified as a 22-year old resident of east Jerusalem.
A 30-year old security guard also injured in the attack, remains in serious condition in hospital. he was operated on overnight and was under sedation in the Hadassah Medical Center intensive care unit.
Security forces raided the Shuafat refugee camp overnight, in search of the assailant as camp residents rioted. The force detained three Palestinians suspected of involvement in the attack.
Residents discharged firecrackers and proclamations of joy and celebrations were also underway in Jenin and other areas of the West Bank.
The shooting occurred at 9 pm at a checkpoint near the Shuafat refugee camp in east Jerusalem. Police said the assailant opened fire, fatally wounding a female soldier and seriously injuring a security guard. A third Israeli was lightly wounded.
According to preliminary investigations, a gunman approached a police roadblock on foot, opened fire and escaped into a waiting car, heading towards the nearby refugee camp.
Video clips appearing on Palestinian social media sites showed a white Toyota arriving at the roadblock and quickly speeding away.
Security forces entered the refugee camp in pursuit of the gunmen, resulting in riots breaking out between local Palestinians and Israeli troops.
Police Commissioner Kobi Shabtai said on Saturday evening that his troops have apprehended one Palestinian suspected of involvement in the shooting attack.
He said the forces were in pursuit of three others, whose identities were known to the police.
"This is a serious attack and we will not rest until all those involved are captured," the police said in a statement.
Prime Minister Yair Lapid, who was briefed on the event, said security forces will find the terrorists.
"Our forces are spread out during the upcoming Sukott holiday and are working day and night to protect the people of Israel. Terror will not prevail," Lapid said.
A spokesperson for the Hamas terror group praised the attack.
"The brave Shuafat operation proves the armed resistance in the West Bank and occupied Jerusalem continues, no matter how repressive the steps taken by the enemy are," Fauzi Barhum said.
The Islamic Jihad terror group also praised the shooting attack after one of its operatives was arrested earlier in the day in the Jenin refugee camp.
Associated Press contributed to this report