Fadi Sabah, 24, a militant from Islamic Jihad, and Mustapha Abu Zalat, 17, a member of a group linked to the Fatah party of Palestinian president Mahmud Abbas, were killed at Al-Fara, the sources said.
The third Palestinian, Ahmed Abu al-Hassan, 25, was killed at Al-Yamoun.
The Israeli army said its troops were conducting operations to arrest wanted militants in the Al-Fara and Al-Yamoun areas when they encountered armed men.
The soldiers opened fire in their direction, hitting three of them, an army spokesman said.
In the northern Gaza Strip, the Israeli air force carried out a dawn raid
in the refugee camp of Jabaliya, the army said.
The target was a building used to store weapons. Occupants of the building were warned ahead of time of the attack, a spokesman said.

Copyright AFP (Agence France-Presse), 2006