Aisha Rabi, 48, was travelling with her husband and two daughters to their home in Bidya in the northern West Bank early on Saturday night when their vehicle was pelted with stones, a relative said.
Her cousin, Isam Rabi, said she was struck in the head and rushed to hospital, where she was pronounced dead.
He said her husband saw a small group of settlers nearby.
Israeli police have said they are investigating.
The area is near several ultra-nationalist Jewish settlements.
It had recently seen several attacks on Israelis, raising the possibility Ms Rabi was killed in a revenge attack.
Last Sunday, a Palestinian assailant killed two Israelis in a nearby settlement and on Thursday, a Palestinian man stabbed and wounded an Israeli soldier.
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