Gaza City (Palestinian Territories) (AFP) - A young Palestinian woman was shot dead by Israeli soldiers near the Gaza border fence on Friday, in another day of protests and violence, Palestinian medical sources said.

Razan al-Najjar, 21, was shot near Khan Yunis in the south of the territory, health ministry spokesman Ashraf al-Qudra said, bringing the toll of Gazans killed by Israeli fire since the end of March to 123.

According to Qudra, Najjar was a volunteer with the ministry, wearing the white uniform of a medic when she was shot in the chest.

An army spokesman said they were looking into the report.

But the military said in a statement that "thousands of rioters" had gathered at five locations along the border, "burning tires adjacent to the security fence and attempting to damage security infrastructure".

Shots were fired at an army vehicle and a Palestinian had crossed into Israel, planted a grenade and returned to Gaza, it said, stressing soldiers were acting "in accordance with the rules of engagement".

An exchange of fire on Tuesday night started with a barrage of rocket and mortars into Israel from Gaza, prompting Israel to respond with strikes on 65 militant sites in Gaza.

It was the worst flare-up since the 2014 war in Gaza and followed weeks of deadly demonstrations and clashes along the border, beginning on March 30.

The protests have demanded that Palestinians who fled or were expelled in the 1948 war surrounding Israel's creation be allowed to return to their former homes, now inside the Jewish state.

They peaked on May 14 when at least 61 Palestinians were killed in clashes as tens of thousands of Gazans protested the US transfer of its embassy in Israel to the disputed city of Jerusalem the same day.

Low-level demonstrations have continued since.