RAMALLAH, West Bank, May 14 (Reuters) - The body of a Palestinian teenager was found in the occupied West Bank on Friday, and Palestinian police and witnesses said he had been shot dead by Jewish settlers after he threw rocks at their car.

The body of 16-year-old Aysar Zaben was not found until after midnight, although the incident happened on Thursday on a road near the city of Ramallah, they said.

An Israeli police spokesman said the incident was being investigated but it was not clear exactly what took place or who was responsible.

Witnesses said a group of Palestinian teenagers threw rocks at a car carrying Jewish settlers as they drove past. The armed settlers then fired at the stone throwers.

The death was the first on either side since Israel and the Palestinians began indirect peace talks on Saturday.

An Israeli army spokesman said that later on Friday, Palestinians had shot at a car belonging to Israelis traveling in the West Bank and that two people were slightly hurt when bullets shattered the car windows. He said troops were searching the area for suspects.

A Palestinian security source told Reuters the shooting may have been prompted by the killing of the teenager, as it happened in the same area.

It appears as if this was a retaliation shooting, said the Palestinian source, who declined to be named.

Some 500,000 Jewish settlers and about 2.5 million Palestinians live in the West Bank and areas near Jerusalem annexed by Israel after its victory in the 1967 Arab-Israeli war. (Reporting by Mohammed Assadi; Writing by Ari Rabinovitch and Ori Lewis in Jerusalem; Editing by Louise Ireland)