Correspondent Wail Dahduh said the wounded had all been evacuated from the scene by helicopter.
The Islamic group Hamas claimed responsibility for late Tuesday's attack, which took place at a highway intersection near the Gush Katif settlement block in central Gaza.
Settlements built on occupied Palestinian territories are considered illegal in the eyes of international law.
Witnesses were quoted as saying the bomber approached a group of people at an al-Matahin Road intersection and blew himself up.
The military wing of the Hamas resistance movement, Izz Al-Din Al-Qassam Brigades, said it carried out the operation and identified the Palestinian who blew himself up as Omar Suleiman Tabash from Absan village, near Khan Yunus.