Israeli troops re-enter Nablus

The incursion came after Israel bombed Gaza City

Israeli tanks have made a brief incursion into the Palestinian city of Nablus in the West Bank, shortly after Israeli aircraft pounded Palestinian targets in the Gaza Strip.

The strikes came after Palestinian gunmen killed two female soldiers and wounded up to 30 others near an army base in southern Israel on Sunday.

Israeli F-16s dropped bombs on Palestinian security installations

Earlier, Israel warned it would react strongly after Palestinians fired a new type of home-made rocket into southern Israel for the first time.

On Sunday night, Israeli F-16s dropped two bombs on Palestinian leader Yasser Arafat's presidential compound and destroyed the naval police headquarters in Gaza.

In a second wave of attacks, Israeli Apache helicopters fired at least eight missiles at a metal workshop in Jabaliya and Beit Laha in the northern Gaza Strip, Palestinian officials said.

Israel has struck Palestinian metal workshops in the past, saying they are used to produce missiles to fire at Israel.

Shops, a kindergarten and several houses in Jabaliya were damaged by the explosions.

More than 30 people were injured in the strikes, including two United Nations workers, hurt by flying glass.

The United Nations special envoy to the region, Terje Roed-Larsen, said he was outraged that Israel deployed bombs of heavy tonnage close to civilian areas and UN facilities.

Terror base

Israeli Prime Minister Ariel Sharon met his security chiefs to discuss a recent upsurge in Palestinian attacks, after returning from a three-day trip to the United States.

The Israeli army said it went into Nablus - the second time in two days - because of "many attacks originating from the Nablus area".

Witnesses said about 20 tanks poured into the city and surrounded Joseph's Tomb, a Jewish religious site abandoned by Israel after it was overrun and ransacked by Palestinians in October, 2000.

The troops withdrew after less than two hours.

Beersheba attack

The day's violence flared when two Palestinian gunmen shot dead two female soldiers and injured five others in a shooting spree outside a military base in the southern Israel town of Beersheba.

The Beersheba attackers were shot dead by Israeli soldiers

Troops returned fire, killing the two men within minutes.

Police say they found a belt of explosives strapped around the body of one of the dead men in Beersheba, suggesting casualties could have been much higher.

No group has said it carried out the attack.

On Sunday morning, militants from the armed wing of the radical Islamic movement Hamas fired an upgraded version of the Qassam rocket into southern Israel from the Gaza Strip.

Israel said it viewed the development very seriously and warned it would take action to "show the Palestinian Authority that Israel will not overlook this escalation".