Sharaf Shalash, 28, sustained bullet wounds last Sunday during a demonstration east of Jabalia in the northern Gaza Strip, ministry spokesman Ashraf al-Qudra said.
His death brings to 11 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.
Nine protesters have died in clashes with Israeli troops, two of them yesterday. Two others were killed in an Israeli air strike on Gaza earlier in the month.
After the Shalash funeral in Jabalia, Palestinians went to the border with Israel where they threw stones at soldiers, who responded with tear gas and live bullets.
One Palestinian was wounded, Qudra said.