The calm along the Gaza-Israel frontier was in exchange for Israel's scaling back restrictions on the territory. However, Gaza's Hamas rulers accused Israel of not honoring the deal.
Leaders from the Islamic militant group were in Egypt on Friday for further talks. Cairo has hoped negotiations could lead to a long-term cease-fire.
The escalation in violence came as thousands of Palestinians demonstrated along Gaza's perimeter fence with Israel on Friday.
The health ministry said a 19-year-old Palestinian protester died shortly after he was injured in southern Gaza Strip. Early Saturday, the ministry added that second demonstrator aged 31 had succumbed to his wounds. More than 50 Palestinians suffered various injuries during protests at several sections of the frontier.
Hamas has hoped that Egyptian mediators could alleviate the blockade that Israel and Egypt imposed after it violently seized full control of Gaza in 2007 from the Western-backed Palestinian Authority.
More than 200 Palestinians and an Israeli soldier have been killed in the border protests that Hamas has led since March last year.
Last month, Israel allowed Gaza fishermen to sail up to 15 nautical miles off the enclave's coast, but retracted the decision this week, scaling it down to the longtime previous limit of nine miles after rockets were fired from Gaza.
Hamas also says Israel delayed the transfer of Qatari money for cash-strapped public institutions in the territory of 2 million people and did not take more measures to ease the grinding power shortage in Gaza.