The four were shot dead in an exchange of gunfire with Israeli soldiers, according to the military.
Israel calls the incident a "flagrant violation of the ceasefire," Israeli media report.
The Palestinians were said to have emerged from a tunnel in the Rafah area when the gunfire broke out. Dozens of Hamas members are believed to be in underground tunnels in eastern Rafah, on the Israeli side of the so-called Yellow Line, which marks the border behind which Israeli soldiers withdrew in accordance with the first phase of the peace plan.
Israel claims to have killed or captured around 40 of them in recent months.
