Thousands of Palestinians have staged a mass protest along Gaza's sealed border with Israel, some burning large Israeli flags and torching tyres while soldiers fired tear gas and live bullets.

Gaza's Health Ministry said 528 Palestinians were wounded, including 122 hit by live Israeli army fire.

Officials said 406 suffered other injuries, including being hit by rubber-coated steel pellets and being overcome by tear gas.

The ministry added that 203 of those hurt were treated at hospitals and the rest at field clinics.

Among those hurt was a Gaza journalist who was shot in the abdomen, the officials said.

It was the third mass rally in two weeks. During this period, 27 Palestinians have been killed and hundreds wounded by army fire in the protests.

On Friday, most of the demonstrators assembled in five tent camps several hundred metres from the border fence.

Smaller groups moved closer to the fence, throwing stones, torching tyres and burning large Israeli flags. Large plumes of black smoke from burning tyres rose into the sky.

Israeli forces fired tear gas, rubber-coated steel pellets and live rounds. The military said demonstrators hurled an explosive device and several firebombs near the fence in what it said was an apparent attempt to damage it.

Footage distributed by the military showed an area of the fence made up of several layers of barbed wire coils.

Protesters stuck a Palestinian flag into the fence and affixed a rope, using it to tug at the coils. One man threw a burning tyre into the fence.

Rights groups have branded the Israeli military's open-fire regulations as unlawful, saying they permit soldiers to use potentially lethal force against unarmed protesters.

Israel has accused Gaza's Islamic militant Hamas rulers of using the protests as a cover for attacks and says snipers only target the main "instigators".

The marches have been organised by Hamas, but large turnouts on two preceding Fridays were also driven by desperation among the territory's two million residents.

Gaza has endured a border blockade by Israel and Egypt since Hamas overran the territory in 2007, a year after winning Palestinian parliament elections.

The blockade has driven Gaza deeper into poverty, with unemployment approaching 50 per cent and electricity available for less than five hours a day.

The marchers are protesting against the blockade, but are also asserting what they say is a "right of return" of Palestinian refugees and their descendants to what is now Israel.

In all, 34 Palestinians have been killed in the past two weeks, 27 during protests.

Seven were killed in other circumstances, including six militants engaged in apparent attempts to carry out attacks or infiltrate Israel.

Gaza's Health Ministry said more than 1,300 Palestinians were wounded by live fire in the past two weeks.

The Israeli military has argued that Gaza militant groups are trying to turn the border area into a combat zone, and said it has a right to defend its sovereign border.

It said soldiers fire live bullets as a last resort, in a "precise and measured manner".

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