Medical sources in Gaza City said the latest victim was a seriously injured teenager who later died of his wounds.
During the operation backed by helicopters on Thursday morning, Israeli troops encircled two houses, seeking Hamas and Islamic Jihad activists. Shots were exchanged, Palestinian security officials said.
The dead Palestinians were identified as Nasir Abu Naja and Sabir Abu Luai, both aged 20, and Umar Abu Muhsin, aged 28. The fourth Palestinian, killed later on Thursday, was identified as Ayyad Muhammad al-Mahmum, aged 55. Al-Mahmum was killed in fierce clashes which broke out in a refugee camp near the border with Egypt, said the sources.
The fifth Palestinian to be killed was a medic treating wounded Palestinians during the Rafah incursion. He was shot and killed by Israeli troops, Palestinian medical sources said.
Muhammad Zainu, 22, was helping a wounded Palestinian to reach an ambulance during clashes in the town's refugee camp when he was hit by an Israeli bullet and became the fifth victim of the army incursion, the sources said.
He was transferred to Gaza City's Shifa hospital, but died upon arrival of serious head injuries, they added.
An Israeli military source said troops were on a mission to detain a wanted Palestinian, and returned fire towards gunmen who attacked them from several locations.
Palestinian witnesses described the incursion as the biggest Israeli operation in Rafah in the past two months. They said infantry and 20 armoured vehicles, including tanks, took part in the early morning raid, as helicopters flew overhead.
At least 18 Palestinians were
wounded in the incursion
Israeli forces regularly conduct searches in the Rafah area
for resistance fighters and tunnels used for smuggling weapons from Egypt.
The deaths brought to 3640 the number of people killed since
the start of al-Aqsa Intifada in late September 2000, including 2720 Palestinians and 854 Israelis, according to an AFP count.
Ordering women out
The troops besieged two houses, one belonging to a fighter from Hamas and the other to an Islamic Jihad member, Khalid al-Qadi. Residents said it appeared that neither man was at
"The soldiers ordered women and children to come out and for the men to remain inside," said witness Usama Abd al-Aal. "Women and children ran outside, weeping and screaming. It was very dark and people were very frightened."
Troops detained al-Qadi's brother and two cousins, residents said. Palestinian Cabinet Minister Saib Uraiqat condemned the Rafah raid, saying Israel's "policy of incursions" would only escalate what he called a cycle of violence.