"The soldiers opened fire in their direction causing the device to explode. The two men are probably dead."
Ambulance workers recover bodies
The Popular Resistance Committee has identified the two men as members of its group and said in a statement they had embarked on a "mission" against Israel.
Israel and several armed Palestinian groups declared a Gaza ceasefire in November.
The truce that ended a substained Israeli military offensive against Palestinian fighters in the territory.
Some militant factions have kept up sporadic cross-border rocket attacks on Israeli cities despite the truce.