The military said troops spotted the gunman early Friday as he planted a bomb along the fence, a tactic used often by Gaza militants.
Dr. Moaiya Hassanain of the Gaza Health Ministry confirmed that a militant was killed by Israeli troops, and AP Television News footage showed medics searching the dry grass near the fence for the man's body before loading it onto a red stretcher.
None of Gaza's militant factions immediately claimed the militant as its member.
Palestinian rocket attacks and violence along the Gaza-Israel border have dropped since Israel's devastating offensive in the Palestinian territory ended in early 2009. But some attacks have continued. They are usually claimed by small militant factions and not by Gaza's Hamas rulers, who have been trying to rein in violence to avoid provoking an Israeli response.
Also Friday, Palestinian residents and the Israeli military said Jewish settlers vandalized property overnight in a Palestinian village in the West Bank.
The incident took place in the village of Jen Safout, where 34-year-old Abdullah Anash said three settlers entered the village and burned his car and that of a neighbor.
APTN footage showed two burned cars and a wall spray-painted with the words "price tag" in Hebrew -- a reference to a radical settler tactic of harming Palestinian property to protest Israeli government policy.
The Israeli military condemned the incident Friday and said police would investigate.
About 300,000 Israeli settlers live among 2.5 million Palestinians in the West Bank.
While the Islamic militants of Hamas control Gaza, the West Bank is home to a Western-backed Palestinian government that wields limited power in the Israeli-controlled territory.
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