Battle rages over Israeli tunnel raid

Palestinians described the raid as a 'war crime'

Israeli army troops have clashed with Palestinians during an ongoing incursion into the Rafah refugee camp aimed at finding and destroying arms-smuggling tunnels.

Seven Palestinians - including two boys aged eight and 15 - have been killed in the large-scale raid involving dozens of Israeli troops backed by tanks and helicopter gunships.

The army said it had discovered two tunnels so far - but no weapons - in the camp, which lies on the Gaza Strip's border with Egypt, and the operation was to continue.

Israel says it was acting on intelligence that Palestinian militants were seeking to smuggle from Egypt shoulder-fired missiles that could be used against tanks, helicopters and fighter jets.

Correspondents says the raid marks a change from previous Israeli tactics of launching brief incursions into Palestinian-controlled areas.

UN Secretary General Kofi Annan has condemned the "disproportionate use of force" as did Palestinian officials who described the raid as a "war crime".

Extensive search

"Operation Root Canal" began when Israeli troops entered the camp from two different directions shortly after midnight (2200 GMT) on Thursday.

Engineering units with dogs trained in locating tunnels joined the search.

Exchanges of fire with Palestinian gunmen swiftly began and have been going on all day.

Palestinian medical sources say that the majority of the more than 50 people injured were hurt when an Israeli helicopter fired a missile at the camp.

Israeli military sources said an Israeli helicopter rocketed a building from which the Palestinians were shooting at the incoming troops, the BBC's James Rodgers in Gaza says.

Two of the dead were identified as members of Palestinian militant groups.

There are reports that one Israeli soldier was also injured.

Residents at the camp say a number of homes have been bulldozed by Israeli forces and explosions could be heard as tunnels were destroyed.

Water and electricity facilities have also been hit, Palestinians said.

The UN Secretary General said Israel's "disproportionate use of force in densely populated areas is not compatible with international humanitarian law" and called on both sides in the conflict "to take every measure to avoid harming innocent civilians".

An aide to Palestinian leader Yasser Arafat also condemned the raid.

The troops have cut off Rafah

"We strongly condemn these Israeli war crimes which are causing a human tragedy," Nabil Abu Rudeina was quoted as telling French news agency AFP.

But Dore Gold, adviser to Israeli Prime Minister Ariel Sharon, said "In uncovering the vast network of arms smuggling tunnels in the area of Rafah, Israel is compelled again to do the work that the Palestinian Authority is supposed to do".

Our correspondent says the border area is one of the most dangerous parts of the Gaza Strip, an area where the Israeli army and Palestinian fighters frequently trade shots.

During the conflict the Israelis have demolished scores of houses at the edge of the refugee camp, saying that they were used as firing positions or that the houses concealed tunnel entrances.

Rafah has been cut off from the rest of the Gaza Strip since Saturday, when the Israeli army cut the territory into four parts.

The incursion comes as the Palestinian leadership faces a new crisis amid reports Prime Minister Ahmed Qurei has threatened to resign just two days after being sworn in.