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Yasser Murtaja, 30, was shot dead by Israeli soldiers while covering mass demonstrations in Gaza on Friday despite wearing a flak jacket clearly labelled 'PRESS'.

His killing caused international outrage, with rights group accusing Israeli armed forces of deliberately targeting journalists.

Last month, the US Agency for International Development (USAID) approved an $11,700 funding grant for a production company which Murtaja co-founded, Ain Media, a US official said.

The grant was for technical assistance and equipment and was approved under a program that supports private sector development.

US State Department spokeswoman Heather Nauert said Murtaja had been vetted under strict US government guidelines.

The US has not yet commented on his shooting.

Murtaja had been hired to begin work for the Norwegian Refugee Council, a major international aid organisation.

He was killed two days before being due to start his new job.

Earlier this week, Israel's Defence Minister Avigdor Lieberman accused the Palestinian journalist of being a member of Hamas's military wing, claiming he had been paid by the group since 2011.

Lieberman did not present any evidence to back his allegations.

Family and friends of Murtaja dismissed the accusations as "ridiculous" and said he was well-known in Gaza's media scene as a brilliant young journalist.

Israel has killed 31 Palestinians since 30 March protests in Gaza began. No Israeli civilians or armed forces have been injured. 

Protesters are demanding the right of return for Palestinian refugees and are organising under the "Great March of Return" banner. 

The EU, UN and international human rights organisations have called for an investigation into the killings.