A shooting by a Palestinian at an industrial zone for a West Bank settlement has killed two Israelis and wounded another, the army said.

An Israeli Defence Forces spokesman, Jonathan Conricus, said the 23-year-old Palestinian had worked in the Barkan industrial zone where the attack took place, in the occupied West Bank.

Conricus called it a terrorist attack but said other unspecified factors were involved.

The Palestinian used a homemade gun in the attack, known locally as a Carlo, according to Conricus. He said it appeared to be a “lone-wolf attack” and that security forces were searching for the suspected perpetrator.

Magen David Adom emergency medical services said their medics had entered a building at Barkan where they found a man and a woman without pulse, and pronounced them dead.

A woman aged 54 was also found wounded, the medical services said.

Speaking at the beginning of the weekly cabinet meeting, Benjamin Netanyahu called the shooting “a very severe terror attack”. The prime minister said he was certain the perpetrator would be caught and brought to justice.

The Palestinian Islamic Jihad militant group called the attack a “natural response” to Israeli crimes in Gaza, Jerusalem and Khan al-Ahmar, a Bedouin village in the West Bank slated for demolition.

The industrial zone is located next to the Israeli settlement Barkan and near the settlement of Ariel in the north of the West Bank.

Palestinians work side by side with Israelis in the industrial zone.