A fierce gun battle erupted early today between Israeli forces and Palestinians near a block of Jewish settlements in Gaza, wounding at least 25 Palestinians and casting doubt on US efforts to convene a meeting of security commanders later in the day.
Palestinians said Israeli attack helicopters rocketed a Palestinian police post next to the Khan Yunis refugee camp and tanks fired shells at the camp.
The Israeli military said there was a "very heavy" exchange of fire, but denied that helicopters were used.
Hospital doctors said at least 25 Palestinians were hurt in the Israeli assault.
Others were trapped in the camp, and medical teams could not reach them because of the heavy gunfire, said Dr Heider Khader, director of Khan Yunis hospital.
The fresh violence followed a day of rocket and mortar exchanges between the two sides. A US-brokered meeting of security commanders, put off for the second time, was rescheduled for later today, a Palestinian official said, but the new outbreak might interfere again.
Eyewitnesses said an explosion, apparently a Palestinian mortar shell exploding at a Jewish settlement, set off the firefight near Khan Yunis.
Palestinians said six Israeli tanks advanced towards the refugee camp, the source of almost daily fire at the nearby Jewish settlements.
Tank fire levelled two houses in the refugee camp west of the city, witnesses said. One house collapsed on its occupants, including children, they said.
Three Palestinian reporters were among the injured, according to doctors, who said their wounds were not serious.
Palestinians said announcements made on mosque loudspeakers in the squalid, poverty-stricken shanty town called on residents and gunmen to take to the streets to defend themselves against Israeli aggression.
Israel has been targeting Palestinian police headquarters and outposts with helicopter and tank fire and rockets, responding to Palestinian mortar barrages at Israeli settlements in Gaza and villages just outside the territory.