The blast on Friday afternoon - the fourth in recent days in the Gaza Strip - was claimed by the al-Aqsa Martyrs Brigades, a Palestinian resistance group.
No further details are as yet available.
Earlier in the day, Israeli troops arrested 10 Palestinians, including six suspected members of resistance group Islamic Jihad, military sources said.
Three suspected Islamic Jihad members were arrested in the northern West Bank city of Jenin during an Israeli incursion during which troops opened fire, sources said.
The raid on Jenin began at 2am on Friday, Aljazeera's correspondent, Ali al-Sumodi, reported.
Forty military vehicles surrounded the city and refugee camp, he said, and clashes erupted between soldiers and Palestinian fighters.
Gunfire from Israeli soldiers damaged two houses, al-Sumodi said.
The soldiers sought two members of the Abu Amiri family, al-Sumodi reported, and the family said the Israeli forces demanded that the two turn themselves in.
Attacks on Israeli soldiers have
increased in the Gaza Strip
Elsewhere, three suspects were picked up in the southern West Bank city of Hebron, where another four Palestinians in possession of hunting rifles were also arrested, Israeli sources said.
Late last month, Israeli troops detained more than 70 suspected Islamic Jihad members across the West Bank, after the group claimed responsibility for a series of attacks despite its allegiance to a de facto truce.