The explosion caused the tunnel to collapse, they said, adding that one of the wounded was in critical condition. An earlier report said two Palestinians were killed and 11 wounded.
The impoverished territory of 1.5 million people has largely relied on the vast network of tunnels since Israel and Egypt sealed Gaza off to all but what it says is vital aid after the Islamist Hamas seized power in June 2007.
Most of the tunnels are used to bring in basic goods like food, household appliances and livestock, but Hamas and other militant groups reportedly use their own more secret tunnels to bring in arms and money.
More than 130 Palestinians have died in cave-ins or been killed by Israeli military operations aimed at the tunnels since the Hamas takeover, medics say.
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