Palestinian protesters hung a Nazi flag bearing the swastika symbol in the West Bank village of Beit Ummar near Hebron on Saturday.
The flag was attached to electrical cables near an Israel Defense Forces post.
Video from the scene showed IDF soldiers shooting the flag down.
Palestinians have occasionally used the Nazi swastika symbol in protests against Israel and its actions in the West Bank and Gaza.
In August this year, Palestinians protesting against an illegal Israeli outpost in the West Bank set fire to a Star of David combined with a swastika.
In 2018, Palestinians at the Gaza border flew a kite marked with a swastika and carrying a petrol bomb into Israel.
Saturday’s incident came amid rising tensions in the region, with a spike in violence in recent months in the West Bank.
A day earlier, a 27-year-old Palestinian man was killed by live fire during clashes with Israeli soldiers near the West Bank town of Beita, the Palestinian Authority health ministry said.
Another eight Palestinians were wounded by rubber-coated bullets, the Palestinians’ official Wafa news agency reported.
The Israeli army said in a statement that its forces had responded to violent clashes near the Evyatar outpost where hundreds of Palestinians participated, including some who burned tires and threw stones at troops.