About 3,000 Palestinians are marching towards an Israeli checkpoint in Hebron, not far from Jewish settlements in the centre of the West Bank city.
The rally is being held to mark the 25th anniversary of the creation of the Islamist militant movement, Hamas.
There were also reports of clashes between protesters with Israeli soldiers elsewhere in the West Bank.
On Thursday, a Palestinian teenager was shot dead by an Israeli border guard at a checkpoint in Hebron.
Israeli police said he had attacked a guard and threatened him with what turned out to be a metal toy pistol.
Tensions have been running high in Hebron in the past week following repeated clashes between soldiers and stone-throwing youths.
Hebron is home to about 180,000 Palestinians and some 500 Jewish settlers who live in the centre of the city, guarded by Israeli troops.
On Thursday, the Palestinian Authority allowed Hamas to organise a rally in the West Bank for the first time since 2007. Some 5,000 people took to the streets of Nablus to celebrate the group's anniversary.
Hamas and the rival Fatah faction, which dominates the PA, have made conciliatory gestures towards each other since the end of last month's Israeli offensive on Gaza, which Israel said it launched to stop rocket-fire.
"Hamas steadfastness and victory in Gaza was a big victory for all Palestinian people," Amin Makboul, a Fatah leader, said in a speech at Thursday's rally in Nablus.
A rift developed between the two groups after Hamas won legislative elections in 2006 and came to power in Gaza a year later. Repeated attempts at reconciliation have so far failed.