A missing Israeli teenager was found dead in the occupied West Bank on Saturday, in what Prime Minister Benjamin Netanyahu called a "heinous murder".

The disappearance of 14-year-old Benjamin Achimeir on Friday sparked a huge manhunt and attacks on Palestinian villages.

"The heinous murder of the boy... is a serious crime," Netanyahu said in a statement.

Israeli forces "are in an intensive pursuit after the heinous murderers and all those who collaborated with them," he said.

Achimeir went missing early on Friday from the Malachi Hashalom outpost near the city of Ramallah.

His body was found nearby, the Israeli army and security forces said.

Hundreds of thousands of Israelis live in West Bank settlements considered illegal under international law.

The incident comes with tensions already high due to the Israel-Hamas war in Gaza.

Following Achimeir's disappearance, Israeli security forces and hundreds of volunteers formed a search party.

On Friday afternoon Jewish settlers who were part of the manhunt raided the village of Al-Mughayyir near Malachi Hashalom, according to an AFP reporter.

At least one person was killed and 25 wounded, the Palestinian health ministry said on Friday.

Overnight, the official Palestinian news agency reported that five Palestinians were injured in another settler attack in the Abu Falah village near Ramallah.