A Gazan died on Saturday after being wounded by Israeli fire during a protest on the border over US recognition of Jerusalem as Israel's capital, a Palestinian health official said.

Jamal Muslih, 20, of Al-Bureij refugee camp in central Gaza, had been seriously wounded by live fire on Friday, health ministry spokesman Ashraf al-Qudra said.

He was buried on Saturday afternoon.

Muslih's death brings to 13 the number of Palestinians killed since US President Donald Trump announced on December 6 that he would recognise Jerusalem as Israel's capital and move the US embassy there from Tel Aviv.

Eleven protesters died after clashes with Israeli troops, and two others were killed in an Israeli air strike on Gaza earlier in the month.

More than 50 Palestinians were wounded in the Friday clashes on the Gaza-Israel border as part of a "day of rage" over the US declaration, called for by both Gaza rulers Hamas and fellow militant group Islamic Jihad.

In the occupied West Bank, the Palestinian health ministry said at least 16 people were wounded when Israeli troops fired live rounds during demonstrations, while others were hit with rubber-coated bullets.

Earlier on Friday, militants in Gaza fired three rockets at southern Israel, two of which were intercepted by the Iron Dome aerial defence system, with the third hitting a village near the border, causing damage but no casualties.

Israeli aircraft and tanks targeted two Hamas positions near the border on Friday afternoon in response, again causing damage but no casualties.

Late Saturday, the Israeli army carried out a second attack, with fighter jets "targeted an observation post belonging to the Hamas terror organisation in the southern Gaza Strip," a statement read.

According to the army, the Friday projectile attack on Israel proved that "Iran, through radical and rogue terror organisations, is operating to deteriorate the situation," risking lives in Gaza and threatening to cause "an escalation".

The Israeli defence ministry has in recent weeks been increasingly highlighting the ties between Hamas and Iran, most notably in a series of Facebook posts by COGAT, the unit responsible for activities in the Palestinian territories.

Speaking on Channel 2 television Saturday night, Defence Minister Avigdor Lieberman claimed that the projectiles fired from Gaza at Israel on Friday were made and supplied by Iran.

Rockets from Gaza are often fired by fringe Islamist groups but Israel holds Hamas responsible for all attacks from the territory.