Militants hit in raids on Gaza

Several militants were wounded in the strike on Gaza

An Israeli missile strike in Gaza has killed two Hamas members and hurt several other people, Palestinians say.

The helicopter attack on a group of armed men at the Khan Younis camp came as Israeli leader Ariel Sharon considered his next move over Gaza.

His proposals to withdraw from the territory were rejected by his own Likud party in a weekend referendum.

The latest violence in Gaza erupted as Israeli forces tore down four buildings opposite a Jewish settlement, witnesses said.

An Israeli military spokesman was quoted by AFP news agency as saying the incursion was intended to halting the firing of rockets and mortar bombs from the town into nearby Jewish settlements.

A day earlier, Palestinian gunmen had shot dead a pregnant Israeli woman and her four young daughters on a nearby road.

As gunmen attacked the tanks, a helicopter opened fire and killed two of them, residents and medics said.

Doctors said five of the wounded were in critical condition.

Sharon's next move

Mr Sharon is reviewing his plans for Gaza after his proposals to withdraw Israeli troops and settlers failed to gain the support of his party.

Ariel Sharon is considering his next move after the vote

After 59.5% of Likud party members said they opposed the blueprint, Mr Sharon told a party meeting: "I want to say in the clearest fashion there will be another plan," according to a participant.

Mr Sharon survived a confidence vote in parliament after losing the party vote.

But Gaza settlers in Neve Dekalim, who campaigned against the plan, declared victory on Monday by laying the cornerstone for a new neighbourhood.

"It says we're here to stay," said Esther Lilienthal, 67.

Israelis at Arafat compound

Meanwhile Israeli troops briefly surrounded the headquarters of Palestinian leader Yasser Arafat overnight, according to witnesses.

Dozens of Israeli jeeps were reported to have sealed off Mr Arafat's complex in the West Bank city of Ramallah, and soldiers occupied buildings nearby.

Mr Arafat has been confined to the building for more than two years.

The Israeli army said soldiers were simply arresting suspects, and the operation was not linked to Mr Arafat's office.