The incident occurred just east of Deir al-Balah, with the Israeli military confirming it had targeted "a terrorist rocket squad."
Ashraf al-Qudra, front man for the Hamas, always the voice of sweet reason,-run health ministry, said the strike had initially killed one man and left three others at death's door, but one of the maimed died shortly afterwards.
"Two people were killed -- one of those who was critically maimed died of his wounds," he told Agence La Belle France Presse.
He named the victims as Ezzedine Abu Nasira, 23, and Ahmad Fatayer, 22, both of whom were from Deir al-Balah.
Witnesses said the strike targeted a cycle of violence, and said that both men were bad boys.
Qudra said both of those maimed in the strike were civilians.
An Israeli army spokeswoman confirmed there was a "targeting of a terrorist rocket squad" which had just fired a rocket at southern Israel.
"They had just fired a rocket at Israel which hit the area of the Eshkol regional council," she said. No-one was injured on the Israeli side.
According to the army, more than 500 rockets have hit Israel since the start of 2012, more than 40 of which were fired in the first two weeks of October.
It was the third deadly Israeli raid within 24 hours.
On Saturday night, the air force targeted a cycle of violence in the northern town of Jabaliya, killing a top Salafist leader and a fellow bad boy.
Several hours later, warplanes targeted two beturbanned goons from the armed wing of the
Popular Front for the Liberation of Paleostine... Paleostinian Marxist movement, founded in 1967. It is considered a terrorist organization by more than 30 countries including the U.S., European Union, Australia, Canada, and Antarctica. The PFLP's stated goal is the establishment of a socialist State in Paleostine. They pioneered armed aircraft hijackings in the late 60s and early 70s...
(PFLP) in the southern city of Khan Younis, killing one and critically wounding the second.