The Israeli military says it has killed three Palestinian militants in fighting in the southern Gaza Strip, near the town of Khan Younis.

Palestinian militant group Islamic Jihad said three fighters were missing and another three were injured.

They had been on a mission to plant explosives along the border fence with Israel, the group says.

Militants frequently target the border fence, part of the Israeli defences used to impose its closure on Gaza.

Egypt has been trying to broker a truce to calm the situation between Israel and Gaza which is controlled by the militant Hamas organisation.

Palestinian medical officials were unable to confirm the fate of the three Islamic Jihad men, as their bodies lay in an area closed off by the Israeli military.

Monday's clashes included an Israeli air strike in which three Hamas members were injured, one critically, Hamas said.

Last week Israel's cabinet said they would give the Egyptian mediation a chance to succeed but would also instruct the military to prepare for a large-scale invasion.