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.
Register for free to continue reading
Registration is a free and easy way to support our truly independent journalism
By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists
Already have an account? sign in
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies