The Israeli army declared the area southwest of Nablus a military zone and carried out raids in the Palestinian villages of Tell and Sarra, in search of suspects.
According to reports, security forces and paramedics discovered Shevah wounded on Israel's Route 60 with his car's windshield riddled with bullets.
"Hamas praises the killers and PA [Palestinian Authority] laws will provide them financial rewards".
Some 51 Israelis and five foreign nationals have been killed since late 2015 in a series of gun, knife and car-ramming attacks, predominantly by Palestinians or Israeli Arabs.
A shooting that killed an Israeli settler on Tuesday in the West Bank led to fresh calls for further settlement building, though the plans approved yesterday were already in the works. "Look no further (as) to why there is no peace..."
Palestinian Foreign Minister Riyad Maliki criticized the United States government on Wednesday for "giving the greenlight" to Israel, to do "whatever it wants with Palestinian land", with regard to Israeli announcements of plans to build over 1,000 new illegal settlement units in the occupied West Bank. Shevah lived in the nearby Gilad Farm outpost.More news: Top tech lobby joins legal battle to keep 'net neutrality'
In the first direct US reaction to the operation, US Ambassador to Israel David Friedman attacked the Palestinian Authority and appeared to be holding it responsible for the killing of the settler, by accusing it of encouraging such operations by "paying salaries to Palestinian prisoners and their families".
On Wednesday morning, the Israel Defense Forces chief of staff, Lt. Gen. Gadi Eisenkot, visited the site of the attack and was briefed by local commanders.
In a tweet, Israeli government minister Michael Oren applauded Friedman "for condemning Hamas's praise of the attack and the Palestinian Authority for reconciling with Hamas". "We bless the heroic Nablus operation which comes as a result of the Zionist occupation's violations and crimes at the expense of our people in the West Bank and Jerusalem".
The Israeli military said "violent riots" took place along the border fence and after firing warning shots into the air, troops opened fire at three protesters who "posed a threat" to the security fence and to soldiers.
Trump's December 6 announcement that he would move the U.S. Embassy from Israel's commercial capital to Jerusalem reversed decades of U.S. foreign policy and upset Palestinians and the worldwide community alike.