The sources said initial indications suggested the blast in Bait Lahiya happened while the men were preparing an explosive device of some kind.
The Israeli army said it was not carrying out any military activities in the area at the time.
Meanwhile, an eight-year-old Palestinian girl was shot dead by the Israeli occupation army in the northern West Bank on Friday.
Palestinian hospital sources said the girl was in a car being driven by her uncle in Yamun, east of Jenin, when she was hit by gunfire. Her uncle was wounded.