At least 11 Palestinians have been killed in Israeli helicopter strikes on a refugee camp in southern Gaza.
Israel has been deploying more troops in Gaza
Witnesses said that some missiles hit a crowd of people in the Rafah camp, but the Israeli army said it had targeted gunmen who were firing at its troops.
A Palestinian man was also shot dead by Israeli troops operating in the camp.
They are combing the area near the border with Egypt looking for the remains of five troops killed in an attack on their vehicle on Wednesday.
Another helicopter missile strike in late afternoon wounded at least three people, witnesses said, bringing the total of injured to more than 40, including women and children.
At the northern end of the Strip, Israeli forces pulled out of Gaza City after two days of clashes with Palestinian militants in the Zeitoun neighbourhood.
DEATH TOLL FROM LATEST VIOLENCE
13 May - 12 Palestinians reported dead in Israeli raids on Rafah refugee camp
12 May - Five Israeli soldiers killed by a rocket fired by Palestinian gunmen near Rafah
11-12 May - 14 Palestinians killed during Israeli incursion in Gaza City
11 May - Six Israeli soldiers killed by an anti-tank bomb in Gaza City
A deal was reportedly agreed for militants to hand over the remains of six Israeli soldiers killed when their armoured vehicle was blown up on Tuesday.
Prior to Thursday's strikes, at least 14 Palestinians had been killed and more than 170 wounded since the Israelis entered Gaza City to destroy home-made weapons factories on Tuesday morning.
Israel's latest missile attack on the Rafah camp left at least four people dead and a number of injured, including women and children, according to witnesses.
The Israeli army said it had fired at armed Palestinian militants.
An earlier air strike on the Rafah camp targeted a group of militants as it was preparing to plant explosive devices, the army said.
At least four people were wounded in the first Rafah attack
Seven people were killed in that attack, including at least four Islamic Jihad militants.
Several Palestinian houses in the area were occupied and demolished as the army said it was widening the buffer zone which runs along the Israeli-controlled border.
The Israeli army said it had occupied the houses to protect soldiers searching for the remains of five soldiers killed in the second attack on an Israeli convoy this week.
Israel's Chief of Staff, Moshe Ya'alon, said the Egyptians were also searching for body parts on their side of the border.
According to Israeli media reports, the second personnel carrier was hit by a huge explosion on Wednesday as it moved in open ground between the Rafah refugee camp and the Egyptian border.
The carrier, which was packed with explosives used to destroy smuggling tunnels, was part of a military convoy travelling on the border road.
Islamic Jihad said it had carried out the attack.
Late on Wednesday evening Israeli tanks were seen pulling out of the Zeitoun area of Gaza.
The remains of the six Israeli soldiers killed in Gaza City were initially handed over to Egyptian mediators.
They were later passed on to the Israelis at the Erez crossing.
Throughout Wednesday, troops had been combing the densely populated quarter looking for the remains, backed up by snipers on rooftops and Apache helicopters hovering overhead.
The BBC's Alan Johnston in Gaza City said the withdrawal prompted people to pour out of their homes to look at the damage left by the army.
The attacks have been the worst blows to Israel's army since November 2002 when nine soldiers and three settlers were killed by gunmen in the West Bank city of Hebron.