Yusef al-Buhel, 48, died after being shot east of the Maghazi refugee camp in the centre of the Hamas-ruled coastal strip, ministry spokesman Ashraf al-Qudra said.
He was one of about 40 Palestinians wounded in the clashes that took place Friday at several points along the border fence.
An Israeli army spokeswoman reported that “hundreds of Palestinians” took part and there were fears that they would try to break through into Israel.
A wave of violence since the start of October has claimed the lives of 136 people on the Palestinian side, 19 Israelis, an American and an Eritrean.
Many of the Palestinians were killed while carrying out attacks on Israelis, while others have been shot dead by Israeli security forces during clashes.