Mohammad Sami al-Dahduh, 19, from Gaza City was shot on December 15 during a demonstration on the Israeli border, ministry spokesman Ashraf al-Qudra said.
His death brings to 12 the number of Palestinians killed since US President Donald Trump announced on December 6 that he would recognise Jerusalem as Israel's capital and move the US embassy there from Tel Aviv.
Ten protesters have died after clashes with Israeli troops, two of them on Friday. Two others were killed in an Israeli air strike on Gaza earlier in the month.
The health ministry in Gaza said the 29-year-old was shot in the head by a sniper, with the UN's human rights chief saying he was "truly shocked" by Abu Thurayeh's death, demanding an "independent and impartial investigation".
On December 18, the Israeli army said it conducted an investigation, according to which it was "impossible to determine whether Abu Thurayeh was injured as a result of riot dispersal means or what caused his death".
"No live fire was aimed at Abu Thurayeh," the army said in a statement.
Major General Yoav Mordechai also wrote in a Facebook post in Arabic that he had asked the Red Cross to provide all information on Abu Thurayeh's evacuation and treatment.
"There are too many question marks around Abu Thurayeh's death," Mordechai wrote. "Let's put an end to the rumours, exaggerations and lies.
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