Military said the four men were heavily armed and one crossed into Israel.
The Israeli army has said its troops shot dead four Palestinians near the boundary area between Gaza and Israel on Saturday morning.
According to a statement by the military, the four men were heavily armed with assault rifles, anti-tank missiles and hand grenades, one of which was hurled at Israeli troops.
The Israeli army opened fire when one of the men crossed into Israel, it said. No casualties were reported in Israeli ranks.
No Palestinian group has claimed responsibility.
Gaza is ruled by Hamas, which has fought three wars with Israel over the past decade. The group issued a statement on Saturday denying its involvement, describing the four men’s actions as an “individual act by angry youths”.
Spokesman Abdel-Latif al-Qanou added that Israel was “responsible for the state of anger and pressure inflicted on our people due to the continued siege on Gaza.”
Israel pulled its troops and settlers from the territory in 2005, but keeps the enclave under a blockade, citing security reasons.
Palestinians have staged weekly protests along the line dividing Gaza and Israel since March 2018 against the Gaza Strip’s dire conditions resulting from 12 years of the Israeli-Egyptian blockade.
At least 301 Palestinians have been killed by Israeli fire in Gaza or the boundary area since then, the majority during demonstrations. Seven Israelis have also been killed.
On August 1, one Palestinian was killed and three Israeli soldiers wounded in an exchange of fire in the southern Strip.
The intensity of the protests has decreased since Israel and Hamas reached an informal ceasefire in May, following the worst round of fighting since a 2014 war between them.
Under the truce – brokered by the United Nations and Egypt – Israel agreed to take steps to ease aspects of its blockade on Gaza but Palestinians have accused it of slowing implementation and not taking enough measures to ease the crippling economic conditions in the coastal enclave.
Israeli Prime Minister Benjamin Netanyahu is widely seen as wanting to avoid a major flare-up in the Palestinian territories as he gears up for a snap general election on September 17 – the country’s second this year.
However, he is likely to face political pressure to act firmly against any significant attack.
The shootings on Saturday came as Muslim Palestinians prepare to mark Eid al-Adha, the feast of the sacrifice.