Pressing on with a massive eight-day-old raid into Jabalya, the Israeli army insisted on Thursday that two people had been "preparing to fire an improvised rocket".
But the "pre-emptive strike" killed two children - 12-year-old Sulayman Abu Ful and 14-year-old Raid Abu Zaid.
The deaths brought to 90 the number of Palestinians killed since Israeli armour first poured into the Gaza Strip on 28 September.
Five Israeli soldiers have also been killed in the occupied territory during the raid.
A total of 4453 people have now been killed since the launch of the intifada, or uprising, four years ago, 3425 of them Palestinians, 954 Israelis and the rest foreigners, according to an AFP count.