Fifteen people were also injured in the attack on the Karni crossing on Thursday, the biggest since Mahmud Abbas won Sunday's election to succeed Yasir Arafat as head of the Palestinian Authority.
The attack took place just before 11pm (2100 GMT) at the crossing where farm produce and other goods enter and leave the Gaza Strip.
The Palestinian fighters entered the crossing in a bomb-laden truck minutes before it was to close, the Israeli military said. As the explosives detonated, at least two fighters stormed the Israeli positions.
Palestinian officials were not immediately available for comment. Abbas has been trying to persuade resistance groups such as Hamas and Islamic Jihad to agree to a ceasefire, but so far with no success.
Shortly afterwards, an Israeli helicopter fired two missiles at a target in a Gaza refugee camp.
Mahmud Abbas has asked the
armed movements to disarm
Witnesses said the missiles struck a medical centre in Dair al-Balah refugee camp run by an Islamic charity with links to Hamas.
There were no immediate reports of casualties.
Claims of responsibility
In a statement, the al-Aqsa Martyrs Brigades - affiliated with Abbas' Fatah faction - said the fighters were killed "in a martyrdom operation" near the Karni crossing in southern Gaza.
Hamas also claimed responsibility for the operation.
The Israeli military blamed two Palestinian bombers for the attack. According to reports on Israeli radio, it appeared that both bombers had been killed.
Armed forces radio said a strong explosion from a 150kg charge was heard around the Karni terminal crossing as a number of Israeli forces were moving towards it.
Israeli rescue services said ambulances faced difficulty in entering the area because of an exchange of gunfire.
About 45 minutes after the attack, the gunfire subsided, Israeli radio said. There are several Israeli military installations near the crossing.
Resisting Israeli occupation
In an interview with Aljazeera, Hamas representative in Lebanon, Usama Hamdan congratulated the armed resistance movements for "this heroic operation".
"However, I am shocked with those who consider our anti-occupation jihad operations as a challenge to the Palestinian cause," he told Aljazeera.
Hamdan considers Abbas' call
for halting resistance a mistake
"We consider these operations as a retaliation for many Israeli crimes, a direct challenge to the Israeli occupation, and also a source of support for the Palestinian cause," he added.
Reacting to Abbas' recent calls for stopping the armed resistance, Hamdan said halting the attacks is a demand to the Israelis and not to the Palestinians.
"I believe the new head of the Palestinian Authority will commit a strategic mistake if he starts his duties by attempting to halt the resistance," Hamdan said.
"If this aggression stops, these operations will naturally stop. But as long as the Israeli aggression, occupation and threats exit, the Palestinians will naturally react to this aggression," he said.
"We consider these operations as a retaliation for many Israeli crimes"
Hamas representative in Beirut
Hamdan added that the latest Palestinian attack conveys a message that there is a national agreement on the resistance, wherease there is disagreement over many other issues.
"Any new Palestinian leader should start with the agreed issues rather than the disputed ones," he said. "If he starts with the agreed issues, he will gain a lot of support. But if he starts with the disputed issues, he will be abandoned even by those who have supported him."
In a separate development, Adil Sharaf, 33, a field leader of al-Aqsa Martyrs Brigades, died on Friday of injuries sustained three months ago during an Israeli raid on Jabalya refugee camp in northern Gaza Strip.