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Two Palestinian militants were killed in Gaza on Tuesday in an explosion whose cause was unclear, with Israel denying claims from authorities in the Hamas-run enclave that it was responsible.

The circumstances of the incident, which occurred near the Gaza Strip's northern border with Israel, left open the question of whether the explosion was accidental.

The Islamic Jihad militant group said the two men were part of its armed wing, confirming only that they died during a "jihad mission".

It identified them as Hussein Ghazi Nasrallah, 25, and Mustafa al-Sultan, 29, saying they were part of the group's engineering unit.

The Palestinian health ministry initially said they had been targeted by an Israeli strike while riding a motorcycle, but that was immediately denied by the military.

The Islamic Jihad statement made no mention of an Israeli attack.

At the scene of the incident a crater several feet deep was left, along with the burnt chassis of a motorcycle.

Islamic Jihad fought alongside Gaza's rulers Hamas in the last war with Israel in 2014.

In late October, Israel blew up one of its tunnels stretching from the Gaza Strip into Israeli territory, killing at least 12 militants.

A month later, mortar rounds from Gaza targeted Israeli soldiers, with Israel's army signalling Islamic Jihad was responsible.

Tuesday's deaths came amid tensions between Palestinians and Israeli forces following US President Donald Trump's announcement he would move the American embassy in Israel to Jerusalem and recognise the city as Israel's capital.

Later Tuesday night, a "projectile" was fired from Gaza towards southern Israel, the army said in a statement, without further details.

A spokeswoman told AFP that it was "very probably" a rocket but that it was not clear where it had landed.

Before the latest deaths, four Gazans, including two Hamas militants, had been killed since the announcement last Wednesday.

Two of those were killed in clashes, while the other two died in Israeli air strikes in response to rocket fire from Gaza.