I think we are trying to do too much in one sentence, and as a result the issues are becoming confused.  How about this:

Muhammad Jamal al-Durrah (1988-2000) ) was a Palestinian boy reported to have been killed by gunfire during a clash between the IDF and Palestinian Security Forces in the Gaza Strip on September 30 2000, at the start of the Second Intifada.  Initial reports, since called into question, stated that al-Durrah was killed by gunfire from IDF positions.

This would preserve the "initial reports", for whatever they are worth, but does not get them tangled up with the issue of the death itself.  Wouldn't this be clearer?