The attack happened near the Kissufim border crossing.
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Palestinian officials briefly held three key members of a group which had claimed responsibility for an attack on Israeli soldiers, before freeing them.
The three members of the Democratic Front for the Liberation of Palestine (DFLP) were detained for five hours.
They were the first arrests of anyone linked to violence since Mahmoud Abbas was elected by Palestinians last month.
The DFLP said the action proved Palestinian officials were caving in to Israeli pressure.
'Caving in'
The DFLP has claimed it carried out an attack at a crossing point between Gaza and Israel on Thursday which wounded two Israeli soldiers and left the attacker dead.
A statement from the security forces on Saturday named the detainees as Issam Abu Daqqa, Talal abu Zarifa and Ziyad Jarjhoun, party officials said.
"We strongly condemn the Palestinian Authority's arrest of our fellow freedom fighters," said Saleh Zeidan, a DFLP official.
"We also condemn the demands by the Palestinian security forces for other members of the party to voluntarily hand themselves in for questioning."
The arrests came ahead of a Middle East summit on Tuesday, where Israeli and Palestinian officials will consider a possible ceasefire, to end four years of violence.
Israeli Prime Minister Ariel Sharon, speaking before the latest arrests, accused the Palestinians of taking insufficient measures against militant groups.
He stressed on Friday that "getting into the roadmap will happen only after the Palestinians halt terrorist activity, dismantle the terror infrastructures and carry out governmental reforms".