There have been clashes in the Gaza Strip after Israeli troops backed by tanks launched several incursions into the territory.
Israel's army has been conducting a campaign in Gaza since late June
Palestinian medical sources said three people had been killed by Israeli fire in southern Gaza.
Palestinian sources said they were militants from the Islamic Jihad group.
The Israeli military said troops had opened fire after spotting what they said were suspicious figures near the border fence with Israel.
Palestinian medics discovered the three bodies after daybreak near the Kissufim crossing with Israel.
No weapons were found near the bodies, but Palestinian security officials said the three had been sent to carry out an attack.
A number of other people were injured in exchanges of fire between Palestinian gunmen and Israeli forces in eastern Gaza.
Israeli soldiers, backed by helicopter gunships, tanks and armoured personnel carriers, moved into Palestinian-controlled areas near the main cargo crossing between Israel and Gaza at Karni, conducting house-to-house searches.
The army said soldiers surrounded a house and exchanged fire with wanted Palestinian militants, including two Hamas members, who were inside.
One of the militants was wounded and all five were arrested, the Israeli army said.
Separately, Palestinian security officials said the Israeli army had moved into farmland near the town of Khan Younis, in southern Gaza, firing machine guns into the fields after calling on farmers to evacuate the area.
Cameramen filming the operation said they came under fire, but were not wounded.
The army said troops were searching for tunnels in the area. Palestinians fired anti-tank missiles at troops who returned fire, the army said.
Israel has been conducting an offensive in Gaza since Palestinian militants seized an Israeli soldier in a cross-border raid on 25 June.
Nearly 200 Palestinians, many of them civilians, have been killed in air raids and ground assaults since then and there has been major damage to Gaza's roads, bridges and government buildings.