Two missiles fired by an Israeli aircraft on Saturday hit the vehicle in which the man was travelling.
Initially, witnesses said he belonged to Hamas, but others said later that he was a leading commander of the Islamic Jihad.
A Palestinian family identified the body of the man as Mohammed al-Dahdouh, an Islamic Jihad commander. Medics said that confusion had arisen over the man's identity because his clothing resembled that of Hamas commanders.
Two women and a four-year-old boy who were in a car behind were also killed in the air strike. Another woman and a child were wounded.
The Israeli army later confirmed the air strike.
More violence erupted on Saturday after the bomb attack in a security building seriously wounded Tareq Abu Rajab, the Palestinian intelligence chief, and killed one of his bodyguards, his nephew Ali Abu Hassira.
The incident inflamed tension between rival armed men from Hamas and the Fatah faction of Mahmoud Abbas, the Palestinian president.
The slain bodyguard's family blamed members of the new security force, which the Hamas-dominated government deployed on Wednesday, for the bombing.
Relatives erected roadblocks of burning tyres in Gaza City after the incident on Saturday, drawing gunfire in which a 14-year-old boy, also a relative of the bodyguard, was shot in the neck and killed.
The gun battle broke out after Hamas fighters tried to clear the burning tyres from the street.
Dozens of Fatah supporters protested against the new Hamas force, chanting, "Fatah, Fatah!"
Tension has been rising in Gaza after the Hamas-led government, elected in January, formed the 3,000-strong Hamas-backed force, under the authority of the interior minister to challenge Abbas.