"Defence Minister Shaul Mofaz ordered a security zone to be laid down on the Palestinian side of the northern Gaza Strip in order to minimise the danger to Israeli communities by the chaos reigning in Gaza," a spokeswoman said on Friday.
"This security zone will be either an electronic fence or a wall. What is vital is to create a no-man's land to which access is forbidden for Palestinians," she added.
In total, the "zone" would run 150 metres deep into Palestinian territory, she said.
In the four days since Israel withdrew its last ground troops from the Gaza Strip at dawn on Monday, effectively ending a 38-year military presence in the territory, parts of the narrow strip of land have been flung into chaos.
Egyptian and Palestinian security forces have struggled to prevent thousands of people from crossing the border between southern Gaza and Egypt, adding to Israeli fears about weapons smuggling.
"In order to deal with this situation, Mr Mofaz has also ordered tougher security controls at Erez and Karni," the ministry's spokeswoman said, referring to the two main crossing points between Gaza and Israel.
"That may cause difficulties for the Palestinians, but the priority is to ensure Israeli security," senior Defence Ministry official Amos Gilad told army radio.
Mofaz has also instructed the security forces to step up surveillance along Israel's own border with Egypt in the southern Negev desert, fearing Palestinians may also try to smuggle weapons across that frontier.