GAZA CITY/ JERUSALEM - Israeli forces shot dead two Palestinian teenagers in the Gaza Strip, medical sources said Sunday, as tensions rose after an apparent bomb attack that wounded several Israeli soldiers on the enclave's border.

The Saturday explosion and ensuing Israeli air strikes marked one of the most serious escalations in the Hamas-ruled territory since the Islamist movement and Israel fought a war in 2014.

Israel's army said it attacked "18 terror targets belonging to the Hamas terror organisation" in two waves of air strikes.

"Eight targets were attacked in a military compound near Deir el Balah, which belongs to the Hamas terror organisation, including weapon-manufacturing and training infrastructures," it said in a statement.

Earlier the army said fighter jets had targeted "six military targets in Gaza belonging to Hamas, including: a terror tunnel in the Zaytun area and military compounds near Deir el-Balah and Khan Yunis".

Two Palestinians were injured in air strikes which hit three bases belonging to Hamas in the east of the blockaded Gaza enclave, Palestinian sources said.

Speaking at a security conference in Munich late Saturday, Israeli Prime Minister Benjamin Netanyahu had called the border blast "very serious" and pledged to "respond appropriately".

According to witnesses, the two dead Palestinians were shot by Israeli forces near the border on Saturday. They were identified by the Gaza health ministry as Salam Sabah and Abdullah Abu Sheikha, both 17, who were killed east of Rafah in the south of the enclave.

They were to be buried later on Sunday.

The Israeli army said that its forces had fired "warning shots" at a number of Palestinians approaching the border fence "in a suspicious manner".

Four Israeli soldiers were wounded, two severely, when an improvised explosive device blew up along the Gaza border fence, but none of their lives were in danger, the army said.

A hospital spokeswoman later said that the condition of one of those seriously wounded had improved.

Spokesman Lieutenant Colonel Jonathan Conricus said a "rogue group" had claimed responsibility for the bomb blast, likely indicating one of the more radical Islamist groups who are present in Gaza.

But he insisted that "from our point of view Hamas is responsible" and said the explosive had been planted during a protest arranged by the group on Friday.

Tensions between the Palestinians and Israel have been high since US President Donald Trump recognised Jerusalem as the capital of the Jewish state in December. Netanyahu will visit the White House next month, a senior US administration official told AFP on Friday.

Meanwhile, Israeli police arrested a number of suspects connected to a major communication company on Sunday, in what media said was a new corruption probe linked to Prime Minister Benjamin Netanyahu.

The suspects included "senior figures" in the Bezeq communications group who were detained as part of a new joint investigation including the Israel Securities Authority, a police statement said without giving more details. Israeli media said they were suspected of having been involved in an affair in which Bezeq received concessions, in return for which Netanyahu received positive coverage on the Bezeq-affiliated news website Walla.

The arrests came just days after police said there were grounds to indict Netanyahu for bribery, fraud and breach of public trust, in the biggest challenge yet to the right-wing premier's long tenure in power.

Netanyahu has repeatedly denied the allegations, which he says are politically motivated, and has rejected calls to step down.

Police believe Netanyahu sought a secret deal for favourable coverage with the publisher of top-selling newspaper Yediot Aharonot, whose publisher Arnon Moses could also face bribery charges.

The attorney general must now decide how to move forward with the police recommendations, a process that could take months.