An Israeli air strike in the Gaza Strip killed a member of Hamas on Thursday and wounded three others, Hamas sources and medical officials said.
The Israeli military confirmed it had carried out a strike targeting Hamas militants who were about to launch balloons rigged with flammable material over the border into Israel.
Hamas sources said the casualties were security men working at an observation post near Rafah, in the southern Gaza Strip.
After the air strike, the Israeli military said Palestinian militants had fired mortar bombs at Israeli soldiers across the border, but no casualties had been reported.
Fires caused by incendiary helium balloons and kites launched by Palestinians in Gaza have ravaged tracts of farmland in Israel in recent months. Israel has vowed to stop the attacks, even at the risk of wider conflict.
Clashes at the Israel-Gaza border have kept tensions high for months. More than 130 Palestinians have been killed by Israeli forces during protests at the frontier held every week since March.
Israel says Hamas has been orchestrating the demonstrations, dubbed The Great March of Return, to provide cover for militants' cross-border attacks. Hamas denies this.
Cross-border violence surged on Saturday when Palestinian militants fired more than 100 rockets into Israel and the Israeli military carried out dozens of air strikes in the Hamas-ruled enclave.