The man was hit in the head when soldiers opened fire in the direction of demonstrators who were throwing stones at them.
It is believed all the people wounded suffered from gunshots.
Around 40 jeeps and armoured trucks entered Ramallah on Tuesday evening – soldiers then imposed a curfew in the centre of the city and surrounded the landmark Abdul Nasser mosque.
People inside the mosque were told to leave in groups of four and present their identity papers to the soldiers.
An Israeli military spokesman confirmed forces had entered the city. He would not give the size of the troop presence but said it was “not a large force”.
He said: “I can confirm that there is IDF (Israeli Defence Force) activity against the terrorist infrastructure in part of Ramallah.
“We are conducting searches but there are no details of any arrests.”
Meanwhile, Palestinian leader Yasser Arafat called on the international community to halt Israel’s “military folly,” while thousands of mourners buried the victims of a series of air strikes in the Gaza Strip.
“I appeal to the international community, the United Nations and the quartet to stop this military folly through which they are looking to destroy our holy ground and our people.”
Mr Arafat was making his first response to five separate air strikes on the Gaza Strip on Monday, which claimed the lives of 10 people and wounded 70 others.
The US State Department has also responded to the Gaza Strip attacks by reiterating that Israel has the right to defend itself.
However, the department also stressed Israel must consider the consequences of its actions.