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Tensions in Gaza continued to rise on Wednesday as local authorities announced that three Palestinians were killed on Sunday after being targeted by Israeli fire south of the strip.

Israeli tanks fired at an Islamic Jihad observation post, east of Rafah, said a spokesperson for the Palestinian health ministry on Wednesday.  

The ministry identified those killed as Hussein al-Amour, 25, Abdulhaleem al-Naqa, 28 and Marwan al-Amour, 25.  

A statement from the armed wing of Islamic Jihad, al-Quds Brigade, identified two of those killed as members.

It remains unclear whether Marwan al-Amour, who died from his wounds later in the day, is also a member.

Israeli military said in a statement that the tank fire came in response to soldiers detonating an explosive device placed near the border fence, hidden inside a pair of fence cutters.

The Ramallah-based ministry also confirmed on Wednesday the death of another Palestinian, Naji Ghonaim, 23, who was shot by Israeli forces during protests.  

The deaths come against a backdrop of Israeli airstrikes on the Gaza Strip last night after a barrage of rocket and mortar fire. Israeli military claimed it struck 25 more Hamas sites overnight, bringing the total to more than 60 targets in the Gaza Strip over 24 hours.

The exchange of fire has raised fears over another war in the beleaguered Palestinian enclave, which would be the fourth since 2008.

Palestinian claims of a ceasefire followed Tuesday's flare-up as explosions continued into the night. Late Tuesday, an Islamic Jihad spokesperson said a ceasefire agreement had been reached.

Senior Hamas official Khalil al-Hayya similarly said on Wednesday that an accord had been reached over the violence in Gaza.

Israel's Intelligence Minister Yisrael Katz, however, denied talk of a deal.

Tuesday's incidents follow weeks of deadly demonstrations and clashes along the Gaza border, beginning 30 March.

The protests, dubbed "the Great Return March", called for the right of return of refugees, and peaked on 14 May with the US decision to open its embassy in the contested capital Jerusalem.

Over 61 Palestinians were killed and 2,400 injured as tens of thousands protested along the besieged strip's border while snipers fired live ammunition and tear gas into the protesters.