Israeli army bulldozers have torn down the homes of more than 200 Palestinians in the Gaza refugee camp of Khan Yunis, United Nations aid officials say.
Khan Yunis residents gather up their remaining belongings
The Israeli military says the operation - a day after mortars fired from Khan Yunis killed a Jewish settler - targeted buildings used by militants.
An Israeli missile strike on the camp overnight killed a Palestinian man.
The violence comes amid tight security as Israelis commemorate Yom Kippur, the holiest day in the Jewish calendar.
The Israeli operation in Khan Yunis began with the missile strike. The Israelis said it targeted militants but Palestinians said a 55-year-old civilian was killed.
Shortly after midnight Israeli troops, tanks and bulldozers moved into Khan Yunis and began tearing down buildings.
The UN agency which cares for Palestinian refugees, Unrwa, said 60 families - around 230 people in total - had lost their houses or shelters.
One man said he ran with his children as the bulldozers closed in and gunfire sounded in the darkness.
"We were forced to leave the house under intensive shooting from the sky and from tanks," father of four Fathi Zaroub told the Associated Press.
"We took nothing from our belongings. We ran away in our pyjamas and we have no other refuge."
But the Israeli army said the UN's figures for the scale of the destruction were exaggerated and all the buildings destroyed were uninhabited structures used by Palestinian militants for shelling the settlement of Neve Dekalim.
On Friday, 24-year-old Tiferet Tratner, an Israeli-American woman, was killed when one of four mortars fired from the camp landed on her house in Neve Dekalim.
Hamas militant group claimed responsibility for the attack.
For the more than a million Palestinians in Gaza, the 8,000 or so settlers, who take up a third of the land, are a hated symbol of the Israeli occupation and militants regard them as legitimate targets, our correspondent says.
On Thursday, three Israeli soldiers were killed in an attack by Palestinian militants on another Gaza settlement, Morag.
Recent attacks have further fuelled anger among some settlers over plans by Israeli Prime Minister Ariel Sharon to pull them out of the Gaza Strip and four enclaves in the West Bank.