Eight-month-old Leila al-Ghandour was exposed to the gas east of Gaza City during major protests on Monday, in which the health ministry said 58 Palestinians were killed most of them by sniper fire.
It was not immediately clear how close to the border fence Ghandour and her family were.
Israeli troops kill over 55 Palestinians protesting US move to shift embassy to Jerusalem
At least five protests sites have been established since demonstrations began on March 30, most of them with both frontline areas and places for families further back.
Monday's protests were against the opening of the controversial US embassy to Israel in Jerusalem, which had angered Palestinians who see the eastern part of the city as their capital.
Tens of thousands of Palestinians rallied near the border fence, with smaller numbers seeking to breach it.
Israeli forces on the border used tear gas and sniper fire on the crowds.
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