UPDATE 5-Al Jazeera journalist killed during Israeli raid in West Bank

* Deadly shooting occurred during Israeli raid

* Israel says troops exchanged fire with Palestinians

* Journalist's wounded colleague blames Israel for death

* Israel says Palestinian gunmen likely shot her (Adds details of shooting, quotes, White House, suspected attack in Jerusalem)

JENIN, West Bank, May 11 (Reuters) - A prominent Palestinian-American Al Jazeera reporter was shot dead during an Israeli raid in the occupied West Bank on Wednesday, with Palestinians and the news channel accusing Israel of killing her and Israel's leader saying she was likely hit by Palestinian fire.

Veteran journalist Shireen Abu Akleh, 51, was wearing a press vest that clearly marked her as "Press" while reporting in the city of Jenin, the Qatar-based outlet said.

She was covering the latest arrest operation launched by the Israeli military amid deadly Arab attacks in Israel.

The death of a distinguished reporter who has been covering Palestinian affairs and the Middle East for over two decades at the popular news channel watched by millions in the Arab world seemed likely to add more fuel to a surging conflict.

In an Al Jazeera video captured in the moments around Abu Akleh's killing, gunfire can be heard in the first few seconds before a man yells "Shireen! Shireen! Ambulance!"

The camera then moves around the corner to show Abu Akleh slumped face-forward on the ground. Other journalists are seen rushing to take cover.

Another Palestinian journalist at the scene, Ali Samoodi, was also wounded.

Palestinian President Mahmoud Abbas and Al Jazeera described Abu Akleh's death as blatant, cold-blooded murder by the Israeli military, which said dozens of Palestinian gunmen had confronted troops who arrested a Hamas militant in Jenin.

Israeli Prime Minister Naftali Bennett said Abbas was making unfounded allegations, before Israel conducted a "thorough investigation" of the events.

"It appears likely that armed Palestinians - who were firing indiscriminately at the time - were responsible for the unfortunate death of the journalist," Bennett said in a statement.

The White House strongly condemned the killing and called for an investigation into her death.

On Twitter, U.S. State Department spokesperson Ned Price said her death was an affront to media freedom everywhere.

Israeli Defence Minister Benny Gantz said "our findings will be relayed, with transparency ... to our American friends and also to the Palestinian Authority and others in the world with whom we are in contact".

CASUALTIES