Mohammed Saad, 21, died after being injured during skirmishes overnight at a protest camp near to the barrier inside the Palestinian enclave, according to a Sky News source in Gaza.
The Gaza health ministry said he was shot dead. The Israeli military has yet to comment on the fatality.
A spokesman for the Israeli Defence Force said troops responded to two outbursts of rioting by the border on Friday afternoon and early evening when protestors threw fire bombs and burning tyres towards Israel.
Later in the night an Israeli tank fired at a Hamas position in northern Gaza.
Egyptian mediators have been working to defuse tensions between Israel and the militant group Hamas that controls Gaza after two-days of rocket fire and airstrikes earlier this week.
The success or failure of these efforts could determine whether the protests are contained or there is a return to a more serious confrontation just days before an Israeli general election.
The demonstration – due to begin at 1pm local time (10am GMT) is to mark one year since the start of weekly protests in Gaza that have left almost 200 Palestinians dead, killed by Israeli forces, and almost 30,000 injured, including around 7,000 by gunfire, according to Palestinian medics and United Nations figures.
Tear gas was fired during a protest at the border fence on Friday
Israel says it shoots at protestors when they try to cut through the 30-mile border fence, threatening Israeli families that live in settlements a few hundred metres away.
But UN investigators said last week the country may be guilty of war crimes for using excessive force.
Lieutenant Colonel Jonathan Conricus, a spokesman for the Israeli military, said live rounds are used as a last resort after verbal warnings, tear gas and other signals have failed.
He said Israel is expecting violent elements within today’s protest to use the same kind of weapons they have deployed over the past 12 months. Protestors have used rocks and burning tyres. Hamas militants also have the ability to fire rockets, missiles and explosive devices such as grenades attached to balloons and kites.
“We still don’t know exactly how many rioters and how violent they will be. Those two indicative factors… will eventually determine the outcome [of the protests],” the spokesman said. “Our intentions are very clear. We are simply here defending our civilians.”
April 2018: Clashes at Gaza-Israel border fence
Protest organisers have called for one million Palestinians to take part, but even a turnout of tens of thousands will increase the chances of a confrontation.
Some 8,000 Israeli troops – double the normal number – backed by tanks, artillery, drones and war planes, are massed at the border in a show of strength to deter Hamas and members of a second militant group called Islamic Jihad from trying to break through.
Overnight an Israeli tank fired at a Hamas militant post in the north of the Palestinian enclave after explosive devices were thrown towards Israel during the evening, the Israeli Defence Force said in a statement.
Gaza City was hit by a rocket on Monday, retaliation for a rocket that injured people north of Tel Aviv
Ten Palestinians were shot and injured by Israeli troops at the border on Friday, according to Gaza medical officials quoted by the Reuters news agency. The Sky News source said Mr Saad, who later died, was among these casualties.
The Palestinian protest on 30 March last year was called the “Great March of Return”, with demonstrators then and on every subsequent Friday demanding the right to return to land Palestinians fled or were forced to leave during the creation of the state of Israel in 1948.
Protestors are also calling for a lifting of a blockade imposed on Gaza by Israel and Egypt for more than a decade. Restrictions on the flow of goods and people in and out of the territory have had a devastating effect on the economy, according to aid agencies.
The difficult condition have been compounded after President Donald Trump, strong supporter of Israel, decided to stop all US aid to Palestinians living in Gaza, home to more than two million people.
Israeli soldiers unpack shells near the Gaza border
More than half of the population is reliant on United Nations’ food aid, some 50% of people are unemployed, clean water is difficult to access and electricity patchy.
UNRWA, the United Nations agency for Palestinian refugees, issued a report on Friday saying the number of Gazans wounded during the border protests over the last 12 months had “brought an already strained health system to the brink of collapse.”
Facts and Figures about Gaza
:: There are around 2.1 million people in the Palestinian enclave
:: Some 42% of the population is under the age of 15, making it one of the youngest populations in the world
:: 96% of water is unsuitable to drink. Most of the population only have access to drinking water once every two days
:: The poverty rate is about 38%, according to UN figures. Other estimates put it as high as 65%
:: Electricity supply in Gaza is typically on for five hours, off for 12
:: 35% of farmland in Gaza and 85% of its fishing water are completely or partially inaccessible because of Israeli restrictions, according to UN data
Jamie McGoldrick, the UN humanitarian coordinator in the Gaza Strip, West Bank and East Jerusalem, appealed for both sides to take efforts to halt further bloodshed.
Efforts by Egypt, which also shares a border with Gaza, to mediate a ceasefire between Israel and Hamas include trying to find an agreement that would see an easing of the blockade by Israel in return for a Palestinian commitment to stop the rockets.
The aftermath of a strike on Gaza City on Monday
There are indications, however, that Hamas does not have complete control over what is fired out of its territory, with the potential for internal disagreements within the group to trigger rogue elements setting off rockets.
For example, it appears that a rocket that struck deep inside Israeli territory on Monday – hitting a house, wounding seven Israelis and sparking a new round of clashes – was either fired from Gaza by mistake or because of a technical failure.
Islamic Jihad – thought to have more rockets than Hamas – is also involved in the provocations.
A house north of Tel Aviv was badly damaged by a rocket on Monday and Israel said seven people were hurt
A total of some 10,000 rockets are thought to be stockpiled in Gaza, with suspicions that Iran, Israel’s arch enemy, is involved in helping to provide money and know-how to militant groups in the territory. There are thought to be some 40,000 armed militants in Gaza.
Israel and Hamas fought three wars from 2007-2014 and have come close to all-out conflict several times since.
The Israeli foreign ministry said 1,233 rockets had been fired from Gaza into Israel in the past year, 94 explosive devices triggered and 8,000 acres of Israeli land set on fire.
