The Israeli army has relaunched a major offensive in the southern Gaza Strip, sealing off a refugee camp and causing panic among its Palestinian residents.
The DFLP office in Gaza was gutted by a missile overnight
Thousands of people had been fleeing Rafah camp, until the army bulldozers broke up the road on Monday morning.
Dozens of houses were torn down last week, leaving 1,100 people homeless.
Israel plans to widen a buffer zone between the camp and Gaza's border after five soldiers were killed there by an anti-tank bomb last week.
Israeli public radio also said that the army was also planning to dig a moat along the Philadelphi road on the Egypt-Gaza
Israel's Supreme Court lifted a temporary injunction on Sunday that banned the military from destroying any more homes in Gaza, saying the army was entitled to act in self-defence.
The army says buildings slated for demolition are used to launch attacks by Palestinian militants, who also smuggle weapons through tunnels under the border.
Rafah camp has been sealed off to prevent militants slipping out among the fleeing civilians, the army said.
Palestinian Prime Minister Ahmed Qurei asked US National Security Adviser Condoleezza Rice to intervene to stop the mass demolition plan at a meeting in Berlin.
Ms Rice said it was "a subject of conversation and a subject of concern" for the US and that officials had told Israel "some of their actions don't create the best atmosphere".
About 400 tents set up last week in schools and public squares in Rafah camp are already filled with those made homeless over the weekend.
UN officials estimate that Israel has already destroyed more than 80 buildings in Rafah camp.
Tents have been set up for those made homeless
At least 13 Israeli soldiers and 29 Palestinian civilians and militants were killed in the Gaza Strip last week.
In previous raids, troops have demolished homes closest to the patrol road, but correspondents say residents expect bulldozers to move deeper into Rafah camp in the current operation.
Israeli security officials are quoted as saying hundreds of soldiers and dozens of armoured vehicles will be involved in the mission.
As frantic families fled with their belongings, Palestinian gunmen were reported to be preparing for a tough fight against the troops.
Israel says it will press on with the demolition work to create what Defence Minister Shaul Mofaz described as a "new reality" on the border between Gaza and Egypt.
Israeli Chief of Staff Lt Gen Moshe Yaalon told an Israeli cabinet meeting on Sunday that hundreds of Palestinian houses had been targeted for demolition.
The buffer zone that is currently 200 metres wide will be widened to 250 metres.
There has been widespread international condemnation of the demolitions, described by the Palestinian cabinet as tantamount to "ethnic cleansing".
The head of the United Nations Relief and Works Agency for Palestinian Refugees (Unwra), Peter Hansen, said he was "extremely alarmed" at the "collective punishment".
Earlier on Monday, Israeli helicopter gunships attacked Palestinian buildings in Gaza City for a third consecutive night.
Missiles hit offices run by Yasser Arafat's Fatah Movement and a building used by the Democratic Front for the Liberation of Palestine.
Both of the sites, which Israel said were used for "terrorist activity", were empty when the missiles struck and no casualties were reported.
Three Palestinians were shot dead overnight, the Israeli army said, while trying to infiltrate a security fence between Gaza and Israel.
A 22-year-old Palestinian man was also killed by Israeli troops during an incursion near the West Bank town of Ramallah.