Israeli tanks rolled into Gaza City early today in the first operation since a heavily criticised bombing raid there killed a terrorist leader and 14 other Palestinians, including nine children.
But a meeting between officials from both sides remained scheduled for later today, despite the violence.
Israeli officials said the talks would cover easing restrictions in the West Bank, where Israel controls seven of the eight main Palestinian towns and cities.
After Tuesday’s air strike, Israel pledged to lift curfews and to release some funds it is withholding from the Palestinian Authority.
But Raanan Gissin, a spokesman for Israeli Prime Minister Ariel Sharon, said everything depended on Palestinian efforts to stop militant attacks.
He also dismissed concerns that the Gaza bombing, in which Hamas military commander Salah Shehadeh was killed, would lead to an upsurge in revenge suicide bombings.
Meanwhile, a Lebanese TV station run by Hezbollah guerrillas said a faction linked to Palestinian leader Yasser Arafat’s Fatah movement was threatening to kill Sharon and other top leaders.
One of the officials on the list, Israeli Environment Minister Tzahi Hanegbi, said he was not surprised by the threat and blamed Arafat.
"I have no doubt that Arafat is connected to every threat and every violent act we have seen in the past two years," he said.
During today’s Gaza raid, witnesses said seven tanks supported a bulldozer that flattened a small
Palestinian military intelligence position and a metal workshop, and then soldiers blew up another workshop in a blast that could be heard across the city.
Gunmen fired at the Israelis, and two Palestinians were wounded in the exchange, they said.
The Israeli military said soldiers destroyed three buildings containing rocket workshops.
A statement said: "During the past few days, dozens of mortar shells and Qassam rockets were launched towards army posts and Israeli communities inside and outside the Gaza Strip."
Also today, Israeli forces destroyed a building in Yamoun, a village near Jenin in the West Bank, and arrested five people, residents said.
In Washington, US Secretary of State Colin Powell said the White House is reviewing Israel’s use of US-made weapons after Tuesday’s air strike.