The victim died when soldiers opened fire in the direction of stonethrowers, witnesses said on Sunday.
The young man, aged about 18, was hit by a bullet in the neck and died in a nearby hospital, the medical source said.
An Israeli military source said a "violent disturbance broke out in Bait Hanun which troops could not control, so they fired towards the group leader and hit him."
The deaths follow yesterday's killings of two Palestinian boys, aged 9 and 15, in confrontations with stone-throwing protesters.
Violence has surged in Gaza since Israeli Prime Minister Ariel Sharon said he planned to pull out soldiers and settlers by the end of next year, as Palestinian resistance groups and the army vie for supremacy before a withdrawal.
West Bank shootings
In the West Bank, Israeli soldiers killed a Palestinian man saying he was trying to infiltrate the settlement of Har Bracha near the West Bank city of Nablus.
Residents of his village said he belonged to the Islamic Jihad resistance group.
Also on Sunday, another Palestinian was shot dead in the Balata refugee camp in Nablus.
In Jerusalem, paramilitary border police in civilian clothes shot dead another Palestinian after chasing his vehicle, which they suspected was carrying Palestinians without entry permits, a police spokesman said.
Israeli troops killed two boys on
Saturday during demonstrations
"The van tried to run down one of the policemen...and then pulled over and stopped. The driver got out and fled on foot. Police fired in the air, and when he didn't stop, shot towards him. He was fatally wounded," he said.
Israel Radio said police had launched an internal investigation into the incident.
A Palestinian civilian in Balata refugee camp near nabl.
Jewish settler killed
A Jewish settler died in an attack claimed by al-Aqsa Martyrs Brigade who said it carried out the attack to avenge Israel's killing of its West Bank leader, Nayf Abu Sharakh, killed in a raid on 26 June.
Palestinian witnesses said two resistance fighters opened fire on the vehicle on a road in the Jenin area of the northern West Bank.
The army said the driver was killed and his wife, who was travelling with him was uninjured. They were identified as residents of the Jewish settlement of Mevo Dotan.
Jewish settlers, living illegally on Palestinian land occupied by Israel, have been frequent targets of attack during nearly four years of Israeli-Palestinian violence.
Also on Sunday, columns of smoke rose in the vicinity of Al-Aqsa mosque in Jerusalem, reported Aljazeera's chief correspondent in Palestine, Walid al-Umari.
Palestinians are wary of Jewish
encroachments on site of al-Aqsa
The sanctuary's guards said that thick smoke rose from the mosque next to the Jewish quarter in the old city in occupied Jerusalem.
According to our correspondent, the Israeli police are working with the sanctuary guards and the Islamic endowment officials to investigate the incident.
Some ultra-orthodox religious Jewish groups have threatened to harm al-Aqsa mosque. Islam's third holiest mosque, it was set on fire by saboteurs in 1969.