A spokesman for the Palestinian security services in Gaza said
the victim was Mahmud al-Farra, 61.
Al-Farra was shot twice on Saturday while travelling in a car as troops attempted to get Palestinian vehicles to pull back from the roadblock at Abu Huli, near the town of Khan Yunus, witnesses said.
The Israeli army said the troops shot at a Palestinian fighter who stood on the road at the junction and then approached a military post on foot.
Two Palestinians and an Israeli were killed in separate shooting attacks in the West Bank and Gaza on Friday.
Elsewhere, nine Palestinian activists were arrested overnight in the north of the West Bank, the Israeli military said.
Reacting to the killing of the Israeli soldier on Friday, Israel threatened on Saturday to cancel plans to ease restrictions on the Palestinian territories for the presidential election.
According to Israeli radio, Israeli Prime Minister Ariel Sharon's top aide, Dov Weisglass, passed on the message to chief election observers Jimmy Carter and Michel Rocard.
The two are expected to convey the message to Mahmud Abbas, the chairman of the Palestine Liberation Organisation and favourite to succeed Yasir Arafat, at a meeting on Saturday on the eve of the Palestinian election.