One of the Palestinians, 29-year-old Hamid Abbas, was in critical condition after being shot in the head and back, according to medics at Gaza's Rafah hospital on Sunday.
The second was shot in the hand, the medics added.
An Israeli military source said troops opened fire in the early hours on a group of suspected Palestinian fighters in a closed military zone on the Rafah border.
"They were suspected to be involved in some form of coordinated weapons smuggling activity," he said. "Two were hit and the rest managed to escape."
A 16-year-old was also shot in the back in Khan Yunus by occupation troops protecting nearby Israeli settlements, but his condition was not thought to be serious, Palestinian medical sources reported.
Israelis and Palestinians both announced an end to hostilities at a summit in Egypt earlier this month.
But while there has been a reduction in violence, a number of deadly incidents have occurred since the summit.
Israeli soldiers man a checkpoint
at Jericho in occupied West Bank
Israeli authorities are expected to allow the return of 16 Palestinian deportees from Gaza to the West Bank.
The deportees are scheduled to leave the Erez crossing in northern Gaza Strip at noon on Sunday, although Israel is considering preventing some of them from taking their wives and children back to the occupied West Bank.
Aljazeera correspondent Walid al-Umari, reporting from the Erez crossing, said the deportees were expected to leave Erez crossing before noon, heading towards the Baitunia crossing west of Ram Allah city.
The deportees do not include those involved in the stand-off at al-Mahd church (Church of the Nativity) in Bethlehem. They are Palestinian activists deported by Israeli occupation authorities from the West Bank to Gaza Strip during the intifada, he said.
None of them have participated in any attacks or operations, but deportation was used as a means of punishment against them after Israel failed to charge them, according to al-Umari.
The 20 Palestinians who were deported by Israel during the church stand-off will return to Bethlehem after the city is handed over to the Palestinian Authority.
Meanwhile, the Arab American University in the West Bank city of Jenin has announced its closure until further notice.
The announcement was made amid death threats to the dean of the law faculty and calls for his resignation.
Construction of the separation
wall continues in the West Bank
One of the university employees was attacked by armed men, who have threatened to kidnap and kill the university's dean of the faculty of law unless he resigned.
The men stopped the car of the librarian, Hasan al-Sabad, dragged him to the ground and questioned him about Amin al-Dawwas, the dean of the law faculty.
Al-Dawwas had previously received threats of being punished by a group of armed men, who have been calling for his resignation.
The university administration has condemned these "dangerous attacks" against its employees, calling on Palestinian President Mahmud Abbas to form an official investigation committee to bring the "criminals" to book.