Another woman sustained serious injuries and was taken to hospital. He held a valid work permit and had been absent from work in the days leading up to the attack, the army said.
Conricus said the suspect was not known to authorities and was not believed to belong to a Palestinian militant group, saying it appeared to be a "lone wolf" attack.
One of the victims was identified as Kim Yehezkel, a 28-year-old mother of an infant son who worked in the office that was attacked.
He was certain the perpetrator would be caught and brought to justice.
Advocates of Israeli settlement policies say the industrial zones are an example of the benefits Palestinians have under Israeli control, including much-needed employment to Palestinians.
Security footage shows the shooter fleeing, still armed with a rifle.
At his weekly Cabinet meeting, Netanyahu said they had been killed "with great cruelty".
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He suggested that Nurmagomedov would face a suspension for his postfight antics. He came to Brooklyn and he broke a bus, he nearly killed a couple of people.
Police initially suspected that the shooting may have been a revenge attack on the man's employers, but army spokesperson Lt. Col. Jonathan Conricus later called it a "terrorist attack" adding that other unspecified factors were involved.
Speaking at Barkan, Yossi Dagan, head of a regional council for Israeli settlements in the area, said there were "Jewish and Palestinian workers standing outside together and crying".
Last month, a Palestinian teenager stabbed an Israeli to death at a junction at the entrance to a large bloc of Israeli settlements in the West Bank near Jerusalem.
More than 50 Israelis and several foreign nationals have been killed since late 2015 in a series of stabbings, shootings and car-ramming attacks, predominantly by Palestinians or Israeli Arabs.
Israel settlements are considered illegal under global law and major stumbling blocks to peace as they are built on land the Palestinians see as part of their future state.