Three Palestinians have been killed by Israeli forces during fresh protests on Gaza's border with Israel, Palestinian health ministry officials say.

The Israeli military said troops had opened fire when people attempted to breach the fence on the frontier.

The protesters are demanding that refugees be allowed to return to ancestral lands that are now in Israel.

But Israel says the militant group Hamas, which dominates Gaza, is staging the rallies in order to launch attacks.

UN Secretary General António Guterres called on all parties to "avoid confrontation and exercise maximum restraint" after 16 people were killed and hundreds of others wounded during similar unrest a week ago.

Piles of tyres were set on fire in an attempt to create a smokescreen to block the view of Israeli snipers, as thousands of protesters gathered at five sites along the 65km-long Israel-Gaza border for fresh protests on Friday.

"Israel took everything from us, the homeland, freedom, our future," 27-year-old protester Samer told Reuters news agency. "I have two kids - a boy and a girl - and if I die, God will take care of them."

Protesters threw stones and firebombs at troops deployed on berms on the Israeli side of the frontier, the Israeli military said, and multiple attempts were made to break through the border fence.

"Our forces are using riot disposal means and live fire in accordance with the rules of engagement," it added.

Gaza's health ministry said two Palestinian men and a 16-year-old boy had been killed by Israeli gunfire, and about 150 other people wounded.

The first death reportedly occurred east of Khan Yunis, in the south of the territory.

Israel's Army Radio cited the military as saying a large group of people had attempted to rush the border fence and that troops had opened fire to stop them.

Hamas and other groups organising the six-week protest campaign, dubbed the Great March of Return, say they are peacefully calling for the right of Palestinian refugees to return to land they fled from or were forced to leave in 1948, when Israel was created.

The Israeli government has long ruled out any right of return and says terrorists are using the cover of the protests to try to cross illegally into its territory.

Palestinians say unarmed protesters were shot last week while posing no threat, and the UN and EU have called for an independent inquiry.

A spokeswoman for the UN high commissioner for human rights warned that, under international law, firearms could be used only in cases of extreme necessity, as a last resort and in response to an imminent threat of death or risk of serious injury.

The Israeli human rights group B'Tselem called on Israeli soldiers to refuse to open fire on unarmed demonstrators.