Live fire by Israeli troops on Palestinians protesters killed a 25-year-old man, bringing the total number of protesters killed to at least 156 since the 'right to return' demonstrations began in March.
Israeli troops shot dead a Palestinian and wounded at least 220 others at protests on Gaza's fence with Israel on Friday, a Gaza hospital official said.
The official said a 25-year-old man had been killed and that of the 220 hurt, 90 suffered wounds as a result of live fire.
At least 156 Palestinians have been killed in the protests and one Israeli soldier was shot dead by a sniper in Gaza since the demonstrations began in March to demand Palestinians' right to return to their lands occupied by Israel.
It was the latest in a series of protests along Gaza's perimeter fence with Israel, aimed in part at trying to break an 11-year-old border blockade. Israel and Egypt sealed Gaza in 2007, after Hamas overran the territory.
Hamas leaders in Gaza
Friday's protest was attended by several exiled Hamas leaders who had entered Gaza a day earlier for meetings of the group's decision-making political bureau.
"We want to break the siege on Gaza once and forever," said Hussam Badran, one of the visiting Hamas leaders.
The political bureau is discussing Egyptian proposals for a truce with Israel and the UN-led reconstruction of Gaza, said Ghazi Hamad, a Gaza-based official in the group.
Meetings began on Thursday and will continue through Saturday, Hamad said. It marked the first time all members of the political bureau got together in Gaza, Hamas has said.
Over the years, truce deals have proven fragile, and it was not clear if the current efforts would succeed.
Netanyahu cancels Columbia trip
Israeli Prime Minister Benjamin Netanyahu on Thursday called off a planned trip to South America and scheduled a meeting of his security Cabinet for Sunday to monitor Gaza developments.
Tensions along the Israel-Gaza fence have escalated since Hamas launched regular protests in the area in late March.
Large turnout has also been driven by widespread desperation in Gaza, amid worsening conditions linked to the blockade.
Power is on for just a few hours a day, unemployment has sky-rocketed and poverty is widening.
The Israeli military said that about 8,000 Palestinians took part in Friday's rally. It said its soldiers sustained no casualties in the incident.
In one area east of Gaza City, protesters burned tires, releasing thick plumes of black smoke.
Israeli troops fired tear gas and live rounds, wounding several protesters and a medic.
Freedom flotilla approaching Gaza
In another development, a boat carrying activists challenging Israel's naval blockade of Gaza is approaching the territory, said the Freedom Flotilla Coalition, an umbrella group for pro-Palestinian and Islamic charities from around the world.
The coalition said on Friday that the Swedish-flagged vessel, Freedom, was nearly 95 kilometres off the coast. The boat and another vessel, which was intercepted by Israeli forces on Sunday, set sail to Gaza from Europe last week.
The Israeli Army had no immediate comment.
Activists have made several attempts to breach the blockade in recent years, most notably in 2010, when Israeli naval commandos killed nine Turks in a raid at sea.