The Israeli army has deployed tanks and called an airstrike on targets in Gaza after its troops were attacked by Palestinian snipers as they patrolled the Israeli side of the border.
It said it "immediately responded" to the Palestinian attack - on a routine patrol in the southern part of the region - on Wednesday.
According to reports, one Hamas militant was shot dead by Israeli forces in the original engagement.
Hamas sources named the dead man as Tayseer Asmairi, a member of its armed wing's monitoring unit in the southern Gaza Strip, but the group did not immediately comment on the sniper fire.
Hamas in pictures
Hamas in pictures
1/10 December 2014
Hamas top leader in the Gaza Strip Ismail Haniya (L), spokesman for the Ezzedine Al-Qassam Brigades, Abu Obaida and Mussa Abu Marzuq (R) greet supporters during a parade marking the 27th anniversary of the Islamist movements creation in Gaza City
2/10 December 2014
Hamas gunmen display their military skills during a rally to commemorate the 27th anniversary of the militant group
3/10 December 2014
Masked members parade in a rally to commemorate the 27th anniversary of the Hamas militant group
4/10 December 2014
Palestinian militants from the Ezzedine al-Qassam brigade, the armed wing of Hamas, carry mock-rockets as they march during a rally to commemorate the 27th anniversary of the Islamist movements creation, at the Nuseirat refugee camp in the Central Gaza
5/10 November 2014
Palestinian young members of the Hamas' Popular Army parade during a graduation ceremony in Jabalia, in the northern Gaza Strip
6/10 November 2014
Members of Hamas security forces march during their graduation ceremony at the fisherman's port in Gaza City
7/10 August 2014
Abu Abida (3L), spokesman for the armed wing of the Hamas speaks during a Hamas militants parade in Shejaiya
8/10 August 2014
A Palestinian man kisses a Hamas militant sniper during a parade by Hamas militants in Shejaiya
9/10 August 2014
Palestinian militants from the Ezzedine al-Qassam Brigades (L), Hamas' armed wing, attend a rally in Gaza City, following a deal hailed by Israel and the Islamist movement as 'victory' in the 50-day war
10/10 August 2014
Palestinian mourners gather during the funeral of three senior Hamas commanders in the southern Gaza Strip town of Rafah. Israeli warplanes killed three top Hamas commanders in southern Gaza inflicting a heavy blow on the movement's armed wing after failing to kill its top military chief
A spokesperson for the Israeli military did not comment on casualties
Gaza residents said the sound of explosions and gunfire lasted about half an hour.
This summer, Israel and Hamas fought a 50-day war, and on Friday Palestinian militants fired a rocket into Israel, prompting a retaliatory airstrike on a Hamas base.
Fighting came to an end after Egypt brokered a truce in 26 August.