The military said no troops were wounded in Wednesday's exchange.
An IDF tank shelled two Hamas military posts in the southern area of the Gaza Strip.
Palestinians seek East Jerusalem as the capital of a state they hope to establish in the occupied West Bank and the Gaza Strip.
Israeli forces killed 59 Palestinians during clashes and protests along the Gaza border on Monday against the U.S. embassy opening in Jerusalem in the conflict's bloodiest day in years.
The protests, which have seen unsuccessful attempts to break through the fence, have dwindled since Monday, and the start of the Islamic holy month of Ramadan on Thursday may further dampen interest. "About 1,200 others suffered other types of injuries, including from tear gas, Palestinian sources said".
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Israel has faced worldwide criticism over its use of live fire, but insists its actions are necessary to defend the border and stop mass infiltration from the Palestinian enclave, which is run by Islamist movement Hamas.
"Behind the protests is Hamas, which governs Gaza and is regarded as a terrorist group by the U.S., Israel and the European Union".
Children in Gaza, who make up the majority of the population, are still struggling with the trauma of previous rounds of violence and war, terrified of another attack and more death and destruction. "This was no peaceful protest", Israeli military spokesman Lt. Col. Jonathan Conricus wrote on Twitter.
Israel says it uses live fire only as a last resort. "Take his word for it".
An extraordinary session of the Arab League Council took place on Wednesday to review means of confronting the USA decision to move its Israeli embassy from Tel Aviv to Jerusalem. Paraguay is slated to do the same next week.
The U.S. was among the few countries that came to Israel's defense, backing its right to protect its border on the same day that it countered worldwide disapproval of moving its embassy from Tel Aviv to Jerusalem. Those talks have been stalled since 2014.
Palestinian want Arab East Jerusalem, which was captured in the 1967 Middle East war, as the capital of a future Palestinian state.
"We are very disappointed at African countries which had celebrated the declaration of Jerusalem as the official capital city of Israel by the USA".