Two Palestinians have been killed by Israeli fire and another 60 injured at a protest along the Gaza border amid Egyptian efforts to broker a ceasefire, Gaza's Health Ministry said.
The protesters threw rocks and firebombs from behind clouds of black smoke from burning tyres at Israeli troops, who responded with tear gas and live fire.
Israel's military said some Palestinians also threw improvised explosives and firebombs at the fence and several were spotted briefly crossing into Israeli territory.
It said troops "fired live rounds selectively according to standard operating procedures".
Hamas officials have been meeting Egyptian officials in Cairo for days, hammering out details of a possible truce.
Israel and Hamas have come close to serious conflict in recent weeks after four months of violence along Gaza's border. In several instances Gaza militants fired rockets and mortars at Israel which responded with air strikes on Gaza.
Hamas has led weekly border protests aimed in part at drawing attention to the Israeli-Egyptian blockade imposed after Hamas took control of Gaza.
Large turnout at the protests has also been driven by widespread desperation in Gaza, amid worsening conditions linked to the blockade. Power is on for just a few hours a day, unemployment has rocketed and poverty is widening.
Abdelatif al-Qanou, a Hamas spokesman, said the protests forced Israel to reconsider its blockade policy. "Our people's sacrifice in the protests will be translated into national achievements soon," he said.
Since the Gaza protests began at the end of March, 168 Palestinians have been killed by Israeli fire, including at least 125 protesters, according to the Hamas-run Gaza Health Ministry and a local rights group.
An Israeli soldier was killed by a Gaza sniper during the same period.
Israel says it is defending its border and accuses Hamas, a group sworn to its destruction, of using the protests as cover for attempts to breach the border fence and attack civilians and soldiers.
Palestinians have thrown explosive devices and opened fire at forces along the border in numerous instances over the past few months, the military says, but the high casualty rate among mainly unarmed protesters has drawn international criticism.
Also on Friday, Israeli police said officers shot and "neutralised" a 30-year-old man from an Arab town in Israel who tried to stab them as they were on duty in Jerusalem's Old City. Israeli media said the attacker was killed.
Since 2015, Palestinians have killed more than 50 Israelis, two visiting Americans and a British tourist in stabbings, shootings and car-ramming attacks. Israeli forces killed more than 260 Palestinians in that period, most of them attackers.
These attacks were at times daily but have since significantly decreased.