At least 10 Palestinians, including two children, are reported killed and several wounded during two separate Israeli army operations in the Gaza Strip.
Rachel Corrie (orange jacket) died confronting an Israeli bulldozer
About 20 Israeli tanks and armoured vehicles backed by helicopters entered the Nusseirat camp early on Monday, exchanging intense gunfire with Palestinian fighters.
Palestinian medical staff said the dead included a four-year-old girl and a 13-year-old boy as well as a man wanted by Israel.
The Israeli operation, which aimed to arrest suspected militants and demolish their houses, lasted several hours.
In a separate incursion, Israeli forces entered parts of the town of Beit Lahiya in northern Gaza and killed two members of the Palestinian police at a checkpoint, according to Palestinian security officials.
Tanks took control of the roads.
The Israelis say that they were conducting a search for what they called terror cells in an area from which rockets and mortars have been fired at Israeli targets.
On Sunday, an American peace activist was killed after she was run over by an Israeli bulldozer in the southern Gaza Strip.
An Israeli military spokesman said that Rachel Corrie's death was an accident.
The US Government has asked Israel for a full investigation.
A convoy of cars, decked with the flags of Palestinian militant groups, moved defiantly through the streets of Nusseirat - a funeral procession for those killed during the Israeli raid.
Witnesses said the four-year-old girl was killed by a stray bullet that entered the house where she was sheltering with her family.
Four-year-old Ihlam Assar was killed by tank fire, said her aunt, Itmead.
"All the children gathered near the kitchen while the tanks were firing outside, from all directions," she said.
"The girl was standing next to my daughter
when she got a bullet in her chest, leaving her in a pool of blood among the scared children."
One of the targets of the Nusseirat raid was said to be Mohammed Saafin, a Palestinian fighter who had links with two militant groups, Islamic Jihad and the al-Aqsa Brigades.
He was killed during a gun battle with Israeli troops and his five-storey house destroyed.
In a statement, the Israeli army accused Mohammed Saafin of involvement in a series of attacks on Israeli targets.
The raids are the latest of almost nightly assaults by Israel against militants in Gaza over the past few weeks.
Witnesses said Ms Corrie, aged 23, from Olympia, Washington, had been trying to stop the demolition of a Palestinian building in the Rafah refugee camp.
There were eight international protesters at the site - four American and four British - all members of a group called International Solidarity Movement.
Ms Corrie was the first member of the organisation to be killed in the conflict in the Palestinian territories.
The Israeli army accused the group of acting irresponsibly by intentionally placing themselves in a combat zone.
Israeli forces use tanks and bulldozers to destroy buildings near the Gaza-Egypt border, which they say are used as cover by Palestinian gunmen to shoot at Israeli troops patrolling the area.
Groups of international protesters have gathered in several locations in the West Bank and Gaza over the last two years, trying to protect families whose homes are due to be demolished by Israeli forces.
West Bank closed
The death occurred as the Israeli army reinforced its closure of the West Bank and Gaza Strip amid fears of attacks during a forthcoming Jewish holiday.
Palestinians will be prevented from entering Israel during the festival of Purim, which runs from Monday to Wednesday, a military statement said.
Israeli radio said the order came from Prime Minister Ariel Sharon and Defence Minister Shaul Mofaz. It added that intelligence sources had warned of attacks being planned.
Palestinian sources said that more than 10,000 workers from Gaza had been prevented from going to work in Israel on Sunday morning.