There was no immediate claim of responsibility for the drive-by shooting, which killed Colonel Jad Tayeh, the head of international co-ordination in the Palestinian intelligence service, and his bodyguards in their car on Friday.
The shooting took place in the Beach refugee camp near the heavily guarded compound of Ismail Haniya, the Palestinian prime minister.
Residents said the car was riddled with bullets.
The motive for the attack was not immediately clear, though officials speculated that it could be an internal feud within the intelligence service. Security officials said the attackers took a black briefcase Tayeh was carrying.
Gaza has been wracked for much of the year by internal violence between fighters from Hamas, which won Palestinian parliamentary elections in January, and those affiliated with the Fatah movement of Mahmoud Abbas, the Palestinian president, which controls the security services.
There was no suggestion of Israeli involvement in the shooting.
Haniya reached an agreement earlier this week with Abbas on forming a coalition government with the intention of ending an international aid embargo and halting violence among Palestinians.
Also on Friday, a small explosion caused minor damage in a courtyard outside a Greek Orthodox church in Gaza City, church workers said.
The early morning blast appeared to have been caused by a small, homemade explosive device, which damaged a door and caused minor damage to the floor and walls, church workers said. No one was injured.
A second explosion hit the church hours later and a concussion grenade was thrown near the church in the afternoon.
Neither of those blasts caused any damage, but church officials worried that the attacks were retaliation for remarks that Pope Benedict XVI made on Tuesday that angered Muslims.
"This is the first time this has ever happened to our church," said the church's priest, Reverend Artinious Alexious. "We don't know why they have done this. We are Greek Orthodox and have no relation to the Pope."