The woman was identified as Fadwa abu Tir, 50, from Umm Tuba village south Jerusalem, and a copy of her ID card was published by Israeli police.
Witnesses told local news agencies that Israeli officers shot the woman dead several times on al-Wad street. Locals and medical services were prevented from reaching her as she bled to death.
Local eye-witness Musa Qawas told The New Arab that she was shot suddenly and "without warning".
Another witness told Radio Muwwal that Fadwa had not been carrying a knife and had been shot for refusing to comply with orders from Israeli troops.
Israeli forces say that she had been attempting a stabbing attack on Israeli forces.
Following the killing, a contingent of Palestinians demonstrated against Israeli forces and the area has now been put on high security alert.
The incident coincides with International Women's Day. Palestinians on social media have been highlighting the sacrifices and struggles made by Palestinian women.
Fadwa's death brings the total number of Palestinians killed by Israeli forces in October to over 191.
— Said Shoaib (@saidshouib) 8 March 2016
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