The ministry said on Saturday that Ahmed al-Qarra, 23, died “as a result of wounds sustained (from) the Israeli occupation forces’ fire” the previous day.
He had been shot in the stomach during demonstrations along Israel‘s fence east of Khan Younis in southern Gaza.
Al-Qarra, who succumbed to his wounds in hospital shortly before midnight on Friday, was the first fatality since June related to the weekly demonstrations that have been taking place for the past 16 months.
Another 38 Palestinians were hit and wounded with live ammunition, the health ministry said in a separate statement.
Israeli forces also reportedly targeted an ambulance.
The Israeli army said troops resorted to live fire against protesters after first using “riot dispersal means”.
“Approximately 5,500 rioters and demonstrators gathered at the Gaza Strip security fence,” a spokeswoman told AFP, saying that some threw explosive devices and grenades and tried to approach the fence.
“Troops responded with riot dispersal means and (live) fire in accordance with standard operating procedures.”
She was unable to confirm if any Palestinians were hit but said no soldiers were injured.
Demonstrators in Gaza began holding the weekly Great March of Return protests in March 2018, demanding the right of Palestinian refugees to return to their homes in historical Palestine from which they were ethnically cleansed in 1948 to make way for the new state of Israel.
They also demand an end to Israel’s 12-year blockade of the Gaza Strip, which has shattered the coastal enclave’s economy and deprived its two million inhabitants of many basic amenities.
Israeli forces often fire on the demonstrators, saying they are seeking to prevent the border being infiltrated.
At least 296 Palestinians have been killed in Gaza by Israeli fire since then, the majority during the demonstrations.
Seven Israelis have been killed.
Hamas, which has ruled the Gaza Strip since 2007, has scaled back the marches in recent months as an Egyptian-brokered unofficial ceasefire was taking shape. But Hamas says Israel is slowing the deal and has not taken enough measures to ease the crippling economic conditions in the coastal enclave.