An Israeli soldier faces a 45-day jail term for the killing of two Gaza women carrying a white flag, under a plea bargain with a military court on Sunday, the army and local media said.

The sniper, identified by Israeli media as "staff sergeant S," was charged with manslaughter in 2010 over the fatal shooting of 64-year-old Riyeh Abu Hajaj and her daughter Majda Abu Hajaj, 37, during Israel's 22-day war in the Gaza Strip that started in late December 2008.

But the Israeli military said the charge had on Sunday been reduced from manslaughter to using a weapon illegally.

"Following a mediation process and upon examination of the evidence with the recommendation of the military court, both sides have reached a plea bargain in which the indictment will be adjusted, and he will be convicted of using a weapon illegally," a military statement said.

Under the deal, "S" would be jailed for 45 days, media reports said.

According to a report by Israeli rights group B'Tselem, the incident occurred on January 4, 2009, when the Abu Hajaj family evacuated their home after it was hit by an Israeli tank shell.

"When they saw tanks about 150 metres (yards) from them, two of them waved the (white) flags, and the children in the group sat on the ground," B'Tselem said.

"Suddenly, and without warning, shots were fired at the residents, killing Majda Abu Hajaj on the spot. Her mother, Riyeh Abu Hajaj, was severely wounded by the gunfire," it said. She later died of her wounds.

The incident was one of those raised in the UN Goldstone report on alleged war crimes by both Israel and Gaza's rulers, the Palestinian Islamist movement Hamas, during the offensive aimed at halting rocket fire from Gaza.

More 1,400 Palestinians and 13 Israelis were killed in the conflict.

The army dismissed dozens of other alleged incidents because "according to the rules of warfare, no faults were found in the forces' actions."

In other cases, the army said there was "not enough evidence proving that legal measures needed to be taken," in a statement issued when the sniper was charged in 2010.