The two Palestinians are the first to be killed in anti-barrier protests

Palestinian officials said the men died when Israeli troops fired on stone-throwing youths in a village where work on the barrier began two days ago.

At least 11 people were injured in the clashes at Bidou, which saw protesters try to halt the building work.

Earlier, two Palestinian gunmen were shot dead after killing an Israeli soldier at the Erez crossing in Gaza.

The Associated Press news agency said about 1,000 demonstrators gathered at Bidou on Thursday.

They threw stones at a jeep and bulldozers which were preparing the ground for a new section of the controversial barrier.

In Gaza, Palestinian gunmen killed an Israeli before being shot themselves

Troops responded with live fire, rubber bullets and tear gas, said witnesses.

Ali Daoud, 24, said he had been throwing stones when he was shot in the right leg.

"We were trying to prevent them from continuing the work on our land, but we found more than 200 soldiers there," he said from a hospital bed.

There were also reports that a second demonstration in the nearby village of Beit Surik also turned violent.

The clashes come a day after a world court hearing into the barrier - which Israel says is necessary to maintain security - ended at The Hague.

'Civilians hurt'

The Palestinian militant group, the Al-Aqsa Martyrs Brigades, has claimed responsibility for the attack which killed an Israeli soldier at the Erez crossing on Thursday morning.

Israeli soldiers returned fire and shot dead the two gunmen.

Reports say the gunfire lasted for some time, injuring several civilians.

The Erez crossing lies on the border between the Gaza Strip and Israel.

Security has been tight at the crossing since January when a female Palestinian suicide bomber blew herself up, killing four Israelis.

Israel has now closed the crossing.