Witnesses said that the two boys were riding bicycles in the street near the entrance of Bait Hanun town when a missile fired by an Israeli reconnaissance plane hit them.
An Aljazeera correspondent said their bodies were badly lacerated, making it difficult to identify them.
The Israeli army said it could not release details on the attack, but said it had fired at two men suspected of involvement in firing rockets into Israel.
An army spokeswoman said the two had been hit as they were collecting a launcher that had been used several times over the past week to fire rockets from northern Gaza.
She said they had been hit by ground forces, not from the air, but would not confirm what sort of weaponry was used.
Witnesses said the two boys did not have weapons on them.