More Israeli tanks have entered northern Gaza as the army intensifies its operation against Palestinian militants in the area.
Palestinian sources say 100 tanks have moved into northern Gaza
Palestinian sources say about 100 tanks have moved into the densely populated Jabaliya refugee camp and the towns of Beit Hanoun and Beit Lahiya.
At least five Palestinians have been killed by missile strikes in Jabaliya.
The move comes after Israel's security cabinet unanimously approved a plan for a major military operation in Gaza.
High death toll
The open-ended ground operation aims to stop Palestinian rocket attacks on Israeli border towns, officials say.
It is the first time for more than two years that Israeli tanks had entered the Jabaliya refugee camp, home to more than 100,000 people and one of the most crowded places in the world.
Palestinians are reportedly burning tyres to obscure the view of Israeli drones flying overhead.
The BBC's Alan Johnston in Gaza says Israeli tanks have thrust into the centre of what is a densely crowded stronghold of groups like the Hamas organisation.
North of the Jabaliya camp, Israeli special forces are reported to have killed one Palestinian when they arrested a group of seven men who were said to have planned an attack on the Erez border crossing between the Gaza Strip and Israel.
The man was reportedly killed when he tried to escape. Israeli radio said the group of men had approached the crossing disguised as Palestinian police.
Thirty-five tanks were seen entering Beit Hanoun, while another 30 were seen pushing into Beit Lahiya and 30 more spotted moving into the eastern sector of Jabaliya, the Associated Press said.
At least 27 Palestinians and three Israelis died in fighting in Gaza on Thursday - one of the bloodiest days since the intifada began in 2000. Many civilians were among the dead and injured.
A day earlier, a Qassam rocket fired from northern Gaza had killed two children in the Israeli town of Sderot.
On Friday, another Palestinian rocket fell in the
Israeli border town, but no one was injured, medics and witnesses said.
'Days of Penitence'
Mr Sharon's plan - codenamed Days of Penitence - includes an expanded ground operation in northern Gaza, officials said.
Zalman Shoval, a senior advisor to Israeli Prime Minister Ariel Sharon, told the BBC on Friday: "No government can allow a situation to develop where terrorists launch missiles and mortar shells at civilian populations."
Palestinians fought running battles with Israeli troops
Dozens of tanks had been deployed because "the army thought that was the best way to go ahead and to drive away potential rocket launchers", he added.
But Palestinian cabinet minister Saeb Erekat said Israel was using "disproportionate force" in the operation.
The Palestinian Authority has called for an urgent meeting of the UN Security Council to debate "barbaric massacres" by Israeli troops in Gaza.
The Gaza Strip has been occupied by Israel since it captured the territory in the 1967 war.
Palestinian rocket attacks are complicating Mr Sharon's plans to remove Israeli settlements and the soldiers that protect them from Gaza, observers say.
Militants are keen to portray any eventual Israeli withdrawal as a retreat under fire, and many expect the violence to escalate.