The reservist was lightly wounded, according to reports, and has been taken to a hospital for further treatment.
Fatah called for the strike due to recent IDF operations in Tulkarm and Gaza.
One terrorist attempted to stab IDF soldiers, while a second terrorist shot at soldiers from Palestinian territory, Israeli media reported.
“At a time when our soldiers are fighting terrorist monsters, the intention to sanction a unit in the IDF is the height of absurdity and a moral low,” Netanyahu wrote in a post on X.
Israel's West Bank expansion sparks debate on settlements, Palestinian rejectionism, and terrorism, challenging prospects for peace and a two-state solution.
The Netzah Yehuda battalion operates in the West Bank and is mainly composed of haredi men and extremist youth who hold far right views and were not included in other combat units in the IDF.
The IDF conducted a 40-hour operation in the West Bank city of Tulkarm. Nine soldiers have been wounded in clashes with Palestinians.
The sanctions come the same day that similar measures were taken by the European Union Council, which sanctioned four individuals and two entities including Lehava.
Judaism, Palestinianism, and the right to sovereignty over the Land of Israel.
Border Police in Jerusalem, along with other forces and Shin Bet intelligence, arrested a wanted individual planning an imminent attack, transferring him for further investigation