Palestinian doctors and witnesses say a four year old child was crushed in his bed when his home in the town of Rafah collapsed, after Israeli troops blew up the house next door.
The Palestinian-ruled town is located in the Gaza Strip, close to the border with Egypt.
The Israeli army says it dynamited a network of tunnels in the area. It claims the tunnels were used to smuggle arms from Egypt.
Earlier Sunday, in Rafah, residents say, Israeli troops, backed by tanks and bulldozers, rolled into the town, killing a 26-year-old Palestinian man.
In another incident, Israeli forces opened fire Sunday on two men, they said were carrying assault rifles and explosives, and trying to enter the Jewish community of Moshav Yevul.
The two men were killed in an ensuing exchange of gunfire. Two soldiers were also lightly wounded in the clashes.
Moshav Yevul is a farming community, located just east of the closely guarded border with Egypt, and a few kilometers south of Israel's fortified boundary with the Gaza Strip.
Meanwhile, in the West Bank, the Israeli army lifted curfews Sunday on the Palestinian-ruled towns of Tulkarem, Ramallah and Jenin.
The move follows media reports that the U-S administration wants Israel to withdraw its troops from more West Bank towns to help ease the living conditions of Palestinians.
Following a campaign of Palestinian suicide bombings in June, Israeli troops took control of most Palestinian towns in the West Bank.
Israeli Prime Minister Ariel Sharon, who is due to meet President Bush at the White House on Wednesday, says there was never any intention to keep the troops there permanently. He says the withdrawals depend on Palestinian security forces making sure that Palestinian militant groups halt their attacks against Israelis.