Israeli fire killed two Palestinian teenagers in Gaza, local health officials said on Sunday, after Israel launched attacks against 18 targets belonging to militant groups in the enclave in response to an explosion that wounded four Israeli soldiers.

The flare-up, which started on Saturday and had died down by Sunday morning, was one of the biggest in the Gaza Strip since a 2014 war between Israel and Palestinian militants.

It began with a bomb blast on the Israel-Gaza border that wounded the Israeli troops. Israel responded with what the military said were air strikes and tank fire against 18 targets belonging to Hamas, the dominant militant group in Gaza, and Islamic Jihad.

Gaza militant groups usually evacuate potential targets in anticipation of retaliation for attacks against Israelis. The Israeli military said weapons-making facilities, training camps and observation posts were hit.

Gaza medics said that on Sunday they retrieved the bodies of two 17-year-old Palestinians killed by the Israeli tank fire. The Israeli military said the tank targeted suspects whom troops thoughts were trying to cross into Israeli territory.

No militant group in Gaza claimed responsibility for Saturday's explosion. Israeli Defence Minister Avigdor Lieberman said the Popular Resistance Committees, one of the smaller armed groups in Gaza, had detonated the bomb that wounded the soldiers.

'We will hunt down those responsible for yesterday's incident,' Lieberman told Israel Radio on Sunday, adding Hamas was ultimately responsible for what happens in Gaza.

Hamas spokesman Fawzi Barhoum blamed the violence on Israel.

'Hamas holds the Israeli occupation fully responsible for the consequences of its continued escalation against our people,' said Barhoum in a statement.

Tensions have risen along the Gaza border since US President Donald Trump's recognition in December of Jerusalem as Israel's capital.