Jamal Muslih, 20, of Al-Bureij refugee camp in central Gaza, had been seriously wounded by live fire yesterday, health ministry spokesman Ashraf al-Qudra said.
His death brings to 13 the number of Palestinians killed since US President Donald Trump announced on December 6 that he would recognise Jerusalem as Israel's capital and move the US embassy there from Tel Aviv.
Eleven protesters died after clashes with Israeli troops, and two others were killed in an Israeli air strike on Gaza earlier in the month.
In the occupied West Bank, the Palestinian health ministry said at least 16 people were wounded when Israeli troops fired live rounds during demonstrations, while others were hit with rubber-coated bullets.
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Earlier yesterday, militants in Gaza fired three rockets at southern Israel, two of which were intercepted by the Iron Dome aerial defence system, with the third hitting a village near the border, causing damage but no casualties.
Rockets from Gaza are often fired by fringe Islamist groups but Israel holds Hamas responsible for all attacks from the territory.