Media reports early on Tuesday suggested an undercover Israeli policeman may also have been seriously wounded in the attack.
Israeli radio said occupation forces also arrested a senior member of the resistance group Hamas and four others during the same raid.
The shootings come just hours after a Palestinian activist was shot and killed when he approached an illegal Jewish settlement in the southern Gaza Strip.
The incident came on the sixth day of a huge Israeli offensive in northern Gaza, which was launched following a homemade Qassam rocket attack that killed two Israeli toddlers.
More than 70 Palestinian men, women and children have died in the raid.
Meanwhile, UN Secretary-General Kofi Annan pledged to launch an investigation into Israeli allegations that Palestinian activists have used UN ambulances to carry weapons and will ask Israel for proof to support its accusations, his spokesman said on Monday.
However, Annan spokesman Fred Eckhard said the UN chief "has no reason whatsoever to doubt" the conclusions of Peter Hansen, the head of the UN Relief and Works Agency (UNRWA) for Palestinian refugees who denied the charge.
"[Annan] intends to call in Israel's ambassador to the UN, Dan Gillerman, to ask what evidence Israel has to support the allegations and to let him know of his decision to launch an investigation to be conducted by a UN team which will leave New York tomorrow," Eckhard said.
The Israeli army released video footage purporting to show Palestinian fighters using a UN ambulance to transport rockets in the Gaza Strip on Saturday.
After viewing the footage on Sunday, Hansen said the blurry pictures, taken by an Israeli drone, showed nothing more than paramedics throwing a folded portable stretcher into the vehicle.
In a letter to Israeli Foreign Minister Silvan Shalom, Hansen demanded on Monday "an immediate public retraction and apology from the government of Israel".