Israel Radio said three armed Palestinians approached the isolated settlement southwest of Gaza City, late on Sunday. Israeli tanks opened fire at them and killed them.
Many armed Palestinian activists were spotted late afternoon on Sunday near the Netzarim settlement (in the northern Gaza Strip) from where mortar shells were fired, injuring no one," said an occupation force source.
"The Israeli troops responded, opening fire in the direction of the source of the bombardment and the Palestinians announced that they had incurred three fatalities in their ranks," the source added.
Occupation troops were preparing to retrieve the bodies at first light.
There was no immediate confirmation of the deaths from Palestinian sources.
Quraya seeks funds
The violence coincided with the visit of Palestinian PM Ahmad Quraya to Saudi Arabia where he was hoping to persuade officials to become more involved in Israeli-Palestinian peace
efforts and to step up its financial support for the cash-strapped Palestinian Authority.
In 2002, Saudi Arabia presented its own proposal for Middle East peace that was partially incorporated into the road map.
PM Quraya hopes to revive a
leading role for Riyadh
The visit will be Quraya's first to the Gulf region since he became prime minister in October.
"I will ask (Saudi Arabia) to play a role with the international community to pressure the Israelis to implement the road map," Quraya said.
Palestinian Foreign Minister Nabil Shath said the Palestinians would ask the Saudis for help in "encouraging Gulf states to support us financially."
The Palestinian economy has been badly harmed by more than three years of violence and more than 60% of the Palestinian Authority budget is supplied by international donors.