The kidnapped man, Roberto Villa Sexto, 32, of the Spanish charity Cooperative Assembly for Peace, had been working in the Gaza Strip and the West Bank for two years, the organisation's spokeswoman said in Madrid.
The man was forced into a yellow Skoda at the edge of the town of Khan Younis.
"They asked me to stay behind," she said.
The gunmen then forced Vila into their car and sped away, she said. Palestinian security officials said they were searching for a yellow Skoda.
Hamas condemns kidnapping
Fawzi Barhoum, a spokesman for the ruling Hamas group, condemned the kidnapping.
"These groups that are behind these acts do not represent the Palestinian tradition, culture and religion," he said.
Tawfiq Abu Khoussa, spokesman for the rival Fatah party, called for the immediate release of Vila. "The protection of our foreigner friends is a collective responsibility for all Palestinians," he said.
Palestinian gunmen have kidnapped a series of foreign journalists and aid workers in Gaza over the past two years, usually pressing the government for money or job guarantees. In most cases, the hostages were quickly released, and none of the hostages have been seriously harmed.
Last week, Palestinian gunmen kidnapped an Associated Press photographer in Gaza City, releasing him unharmed about 16 hours later.