Two Palestinians were killed on Saturday and more than 20 others wounded in Israeli shelling, Palestinian sources said, as clashes erupted along the border in which three soldiers were also hurt.

"Two Palestinians were killed and 22 others wounded, six of them seriously," said spokesman Yahya Khader of the Hamas government's emergency services in the Gaza Strip, updating an earlier toll.

Palestinian witnesses said earlier that Gaza militants fired a rocket at an Israeli jeep that exploded on the edge of the border, east of Gaza City, prompting the Israelis to respond with artillery fire.

Three soldiers were wounded, two of them seriously, Israeli military sources said, while army radio said the jeep was blown up by an anti-tank rocket. The army itself gave no immediate comment on the violence.

With tensions mounting in the border region, five Palestinians were also wounded in Israeli shelling near Khan Yunis in southern Gaza, Palestinian medics said.