Palestinian medics told the BBC that Ziad Abu Ein died from complications related to tear gas exposure.
But several witnesses said the minister had been hit and shoved by soldiers. One said he had been hit in the chest by a tear-gas canister fired by them.
Israel’s Defence Minister Moshe Yaalon expressed regret for the minister’s death in a statement.
A statement released by the Israel Defense Forces (IDF) said its forces had “halted the progress of rioters into the civilian community of Adei-Ad using riot-dispersal means”.
“The IDF is reviewing the circumstances of the participation of Ziad Abu Ein, and his later death,” it added.
Israeli and Jordanian experts would attend a post-mortem examination, the IDF said. It has also proposed setting up a joint team with the Palestinians to investigate Mr Abu Ein’s death.
UN Secretary General Ban Ki-moon called for an investigation into the death, and urged “all sides to exercise maximum restraint and avoid escalation”.
Following the incident dozens of Palestinians gathered at the scene, near the village of Turmusaya, setting fire to tyres and throwing stones at security forces, Voice of Israel radio reported.
In recent weeks, 10 Israelis and an Ecuadorean have been killed by Palestinians in a series of attacks. Thirteen Palestinians have also been killed, among them several of the assailants.
Mr Abu Ein, a minister without portfolio, was among dozens of foreign and Palestinian activists taking part in a protest against land confiscations.
They had planned to plant olive tree saplings on a patch of land near the Jewish settlement of Shiloh, which Palestinians believe has been earmarked for annexation by Israel.
In the course of the protest, they came into confrontation with a group of about 15 Israeli soldiers.
Leading Palestinian activist Mahmoud Aloul, who was also at the protest, told the Associated Press news agency that the soldiers had fired tear gas and had beaten some of the activists with rifle butts.
At one point, Mr Abu Ein was hit by a tear gas canister, Mr Aloul said.
The Reuters photographer said he had seen Mr Abu Ein being struck by a hand on the neck during an altercation with two soldiers.
An AFP news agency photographer said the minister had been hit in the chest.
Photos of the incident showed Mr Abu Ein lying unconscious before he was taken away in an ambulance. He died before reaching hospital in the nearby city of Ramallah.
There are reports that he had a health condition that may have contributed to his death.
The BBC’s Kevin Connolly in Jerusalem says Palestinians are likely to see the exact cause of death as a secondary issue, and it will serve to sharpen tensions.
Condemning “the brutal assault” on Mr Abu Ein as a “barbaric act”, Palestinian Authority President Mahmoud Abbas promised to take unspecified measures and declared three days of mourning.
One senior Palestinian official said the Palestinian Authority would halt security co-ordination with Israel.
Hanan Ashrawi, a senior official in the Palestine Liberation Organisation (PLO), said that she was “outraged” by the minister’s death.
“It’s extremely sad that a colleague and an old friend has been killed in such a cruel way” she said. “Ziad was guilty of nothing more than planting olive trees where Israel would uproot trees.”
Mr Abu Ein once received the death sentence, commuted to life imprisonment, from a court in Israel for a 1979 bombing that killed two Israeli teenagers.
He was released in 1985 as part of a prisoner exchange that saw the release of three Israeli soldiers captured in Lebanon.