Yussef Abou Madi, 14, was shot when firing erupted as Israeli troops pulled out of Al-Msaddar, north of the Deir al-Balah refugee camp, after a six-hour operation to arrest militants.
Earlier in the raid, 26-year-old Marwan Abu Jayab was killed after being hit by several bullets. Palestinian officials initially claimed he was a civilian but the armed wing of the radical Islamic group Hamas said he was one of their members.
An Israeli army spokesman said the soldiers had shot at the man, who had fired an anti-tank rocket.
Hamas said he had hit the tank before being killed. The army said it suffered no casualties but did not comment on possible damage to its tank.
Palestinian officials said a total of 15 people were injured and 15 arrested in the incursion.
The latest death brings to 3,130 the number of people killed since the Palestinian uprising against Israeli occupation erupted in September 2000, including 2,353 Palestinians and 719 Israelis.
An army spokesman confirmed there was an operation under way in the area overnight to hunt down "terrorists who often fire rockets at the Jewish settlement of Kfar Darom, or who attack Israelis with grenades or bombs from this sector".
An Israeli military source also said that five Palestinians from the radical Islamic group Hamas were arrested in the West Bank towns of Qalqilya and Hebron.
Late Saturday, an armed Palestinian was shot dead by Israeli forces as he tried to break into the Jewish settlement of Kiryat Arba on the edge of Hebron, a flashpoint city where some 600 settlers live in an enclave surrounded by 120,000 Palestinians.
Earlier in the day, two foreign peace activists, and American and a Dane, were wounded in clashes between Palestinian stone-throwers and Israeli soldiers in the northern West Bank city of Jenin, Palestinian medical sources said.
American Barry Avery, 24, suffered a serious gunshot wound to the face, while Lasse Schmidt, 35, of Denmark was wounded in the leg by shrapnel.
Witnesses told AFP "an Israeli tank opened fired in the evening in the direction of a group of five pacifists in the street" amid the clashes.
A column of Israeli armour had thrust into the centre of the city and its adjacent refugee camp on Friday and imposed a curfew.
