Jihad Abu Swarah, a member of Hamas' armed wing, the Izz-al-Din al-Qassam Brigades was killed when Israeli helicopters fired at least three missiles at his home, in al-Nusairat refugee camp, in southern Gaza early on Thursday.
At least three members of his family were injured, reported our correspondent.
Israeli jeeps and tanks from the neighbouring Jewish settlement of Netzarim stormed the camp, surrounding Swarah's home.
Clashes erupted between Israeli soldiers and Palestinian resistance fighters west of the refugee camp.
Israel has vowed to make every Hamas activist a legitimate target, forcing resistance fighters to take extra security precautions.
Elsewhere in Gaza, a civilian was shot dead during an Israeli invasion, reported our correspondent.
Five other Palestinians were injured when occupation forces raided the Brazil refugee camp in Rafah.
Israeli forces have targeted
Hamas on almost daily basis
Meanwhile, Israeli forces raided areas in the occupied West Bank towns of Ram Allah, al-Bira and Jenin.
The raids in Ram Allah were concentrated around besieged Palestinian President Yasir Arafat's compound.
Soldiers stormed buildings belonging to the Palestinian Authority and civilian homes. There were no detentions reported.
But near the West Bank city of Jenin, forces detained 12 Palestinians, including two young women, late on Wednesday.
A curfew was slapped on Jenin after Thursday's incursion.
On the political front, Arafat is expected to head a Fatah meeting later on Thursday to discuss the formation of incoming Palestinian Prime Minister Ahmad Quraya's government.
The new government will include 23 ministers.
Quraya is replacing Mahmud Abbas, who resigned on 6 September after failing to secure backing from Arafat and popular support.
Quraya was expected to form an emergency cabinet earlier this month, but shelved plans after Israel threatened to "expel" Arafat.