The attack took place at around 0220 GMT on Friday. Both the wounded were flown to a hospital in southern Israel for treatment, Israeli military sources said.
“The operation resulted in the killing of three Israeli soldiers in a military base near the Nezarim settlement,” Hamas and Islamic Jihad said in a statement sent to Aljazeera's Gaza office.
An Israeli army source said one of the gunmen opened fire on a women's dormitory inside the settlement, killing two women and injuring a third.
The statement claims the remaining attacker escaped unharmed.
The shootings follow one of the worst nights of violence in recent months. On Monday, a series of deadly Israeli air raids in north and central Gaza claimed the lives of at least 11 Palestinians. A further 40 were injured.
One of the dead was a doctor who went to administer to the injured.
Just after he arrived on the scene an Israeli helicopter gunship fired a missile into a crowd of people who were gathered round the smouldering chassis of a car targeted minutes earlier.
Death of hope
The US-brokered road map, which sought the creation of an independent Palestinian state by 2005, now lies in tatters.
Masked Hamas fighters carry
Palestinian Ayoub Al-Malek
The spiral of violence continues unabated; the Israelis continue to build an apartheid wall through the occupied West Bank, press on with their programme of targeted assassinations and Palestinian gunmen and human bombers respond by attacking both settlements and Israeli cities.
In a separate incident, another Palestinian was gunned down in central Gaza late on Thursday after he shot and slightly injured three Israelis as they were driving from Kissufim towards a settlement, an army spokesman said.
The three - two adults and a child - were driving on a private road heading towards the Jewish settlement bloc of Gush Katif when the attacker fired on their car, AFP reported the spokesman as saying.
They were slightly wounded by flying glass, while the gunman, from the Islamic Jihad movement, was shot dead.
Aljazeera’s correspondent in the West Bank reported earlier that Israeli forces raided al-Yamoon town, claiming they were tracking “wanted activists.”
The soldiers searched homes, beating and arresting some of the residents, the correspondent said.
Jenin is currently under total lock down.