Hamas’s armed wing, Ezzedine al-Qassam Brigades, on Thursday named the two killed as Rami Muneer al-Arier and Ismail Abdul Kareem Shamali, saying they lost their lives "following the collapse of a resistance tunnel."
At least five people were in the tunnel when it collapsed. A source close to the Brigades said efforts were underway to find and rescue the other three.
The population in Gaza relies on underground routes to bring in basic commodities.
The development comes as Israeli and the Egyptian army forces have launched a campaign to destroy the tunnels.
Egypt has set up a buffer zone on its border with Gaza and has destroyed hundreds of lifeline tunnels since the country’s first democratically-elected president, Mohamed Morsi, was toppled in a 2013 military coup led by Abdel Fattah el-Sisi, the then army chief and the current president.
In September 2015, Egypt built huge pipelines along the Gaza border and flooded the last remaining tunnels.
Egypt also pumped “large quantities of sea water” into the ground and thus made soil prone to collapse.
In February, Israeli Energy Minister Yuval Steinitz said the tunnels were flooded at the request of Tel Aviv.
The Gaza Strip has been under an Israeli siege since June 2007. The blockade has caused a decline in the standards of living as well as unprecedented levels of unemployment and unrelenting poverty.
The Israeli regime denies about 1.8 million people in Gaza their basic rights, such as freedom of movement, jobs with proper wages as well as adequate healthcare and education.