The Palestinian health ministry says at least seven people have been killed and 350 wounded, many of them by Israeli gunfire.
The Israeli military reported "rioting" at six places and said it was "firing towards main instigators".
Palestinians have pitched five camps near the border for the protest, dubbed the Great March of Return.
They are demanding that refugees be allowed to return to homes that are now in Israel.
What is the latest at the border?
The Israel Defense Forces (IDF) said there were about 17,000 Palestinians in five locations along the border fence.
The IDF said troops were "firing towards the main instigators" to break up rioting that included the burning of tyres and the throwing of Molotov cocktails and stones at the fence.
Israel has deployed tanks and snipers and is using tear gas to force Palestinians away from the border.
The IDF said it had "enforced a closed military zone" in the area surrounding Gaza.
Palestinian health officials said that a 16-year-old boy was among the dead.
They said that one person was killed before Friday's protest started. Omar Samour, a 27-year-old farmer, was killed by Israeli tank fire near Khan Yunis.
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