The Israeli army confirmed the raid and shooting but did not have details of the man's condition.
It said the raid was carried out to detain Azzam al-Shalalda, 27, who was suspected of stabbing an Israeli settler two weeks ago in the West Bank.
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The director of Hebron's al-Ahly hospital, Jehad Shawar, told Palestine radio 20-30 men arrived at the clinic in two mini vans at around three o'clock in the morning.
They entered with someone in a wheelchair pretending to be pregnant.
Israeli undercover forces are seen pushing a wounded Palestinian that they have detained on a wheelchair. REUTERS
CCTV footage from inside the hospital showed a large group of men armed with pistols and rifles, some with beards and others with keffiyeh scarves on their heads, walking through the corridors telling hospital workers to get out of the way.
"They held the staff at gunpoint and stormed the room of Shalalda," Shawar said.
Shalalda's brother Bilal, who was asleep in the room, said he was tied to the bed by the Israeli forces.
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A cousin, Abdallah, who was in the bathroom, was shot dead when he suddenly entered the room, Shawar said.
"As his cousin exited the bathroom, which was inside the room, they fired five bullets, one bullet in the head, one in the chest and three in his body," Shawar told the radio station.
"They took Azzam and placed him in the wheelchair they brought the woman in and they exited the room preventing anyone from giving medical aid to the young man lying on the floor."
A medic looks at blood stain of the Palestinian man who was killed by Israeli undercover forces. REUTERS/Mussa Qawasma
Palestinian Health Minister Jawad Awad accused Israeli security forces of "executing" Abdallah al-Shalalda, who he said was escorting a relative inside the hospital.
"The international community must intervene to protect our people from the Israeli killing machine," he said.
NO REFUGE
Israel's Shin Bet domestic security agency issued a statement afterwards saying it "will not permit terror operatives to hide in any places of refuge".
Bilal al-Shalalda told Reuters TV: "As soon they entered the room they tied me to the bed. (My cousin) was inside the bathroom and wanted to wash for prayer. As he was exiting the bathroom, one of the undercover men shouted at him to stop and they opened fire.
"He remained on the ground bleeding and they hit my brother on his head and took him away."
The army said Azzam Shalalda carried out a stabbing in Gush Etzion in the West Bank last month. After stabbing an Israeli settler, he was shot by his victim but managed to escape.
A military spokeswoman said he and his family, including the cousin, were known operatives of political and militant Islamist group Hamas.
Israel frequently carries out undercover operations in the occupied West Bank, with special forces who speak fluent Arabic dressed as locals. There was another raid on a hospital to detain a suspect last month.
There has been a wave of violence across Israel, Jerusalem and the West Bank since Oct. 1, with 12 Israelis stabbed, shot or killed in vehicle attacks by Palestinians.
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Seventy-six Palestinians have been shot dead by Israeli security forces, including 44 people Israeli police said were carrying out or about to carry out attacks.
The violence has in part been fueled by dispute over access to a site in Jerusalem that is holy to both Muslims and Jews.
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