According to the Israeli army, Hamza Zaamara drove up on Wednesday morning to the entrance of the Karmei Tzur settlement, built on Palestinian lands belonging to the towns of Halhul and Beit Ummar, and stabbed a guard.
Two Palestinians were killed during earlier raids which the Israeli army said were launched to find Shevach's killers.
In a statement issued yesterday, the European Union Representative and the EU Heads of Mission in Jerusalem and Ramallah expressed "strong concern" over the demolition. Shaath also reported that the Japanese officials, including the Foreign Minister Taro Kono and other MPs, had announced their support for an worldwide peace conference to solve the Israeli-Palestinian conflict based on global resolutions.
Earlier on Tuesday, Israeli forces shot dead the suspected Palestinian mastermind of a fatal January ambush on another settler rabbi, Raziel Shevach.
The statement concluded by calling on "the Israeli authorities to rebuild the school structures in the same place". Recognition of the Jewish state, the PLO said, would be contingent on Israel's recognition of "Palestine" and the cessation of all settlement building in the West Bank.
PPS said another Palestinian was detained from Nablus district. Another security guard opened fire on the assailant and killed him, it said.
A spokesperson for the Israeli army told Al Jazeera it was investigating and could not confirm the reports.
Late on Tuesday, Israeli forces shot dead at least one Palestinian during a raid in the West Bank city of Nablus that led to confrontations with residents, Palestinian health officials said.
Earlier this week in response to Shevach's murder, Israel's government in a rare move chose to "legalise" the rogue West Bank outpost where he lived, Havat Gilad, essentially creating a new settlement.
The Shin Bet Israeli security agency said that he was armed.
Israeli settlements are seen as illegal under worldwide law and a major obstacle to peace as they are built on Palestinian land, seen as central to a future Palestinian state.
"We must say it in a clear way that there will be only one sovereign state between Jordan and the [Mediterranean] sea, that is the State of Israel with united Jerusalem as its capital", he said.