A major Israeli offensive on the Khan Younis refugee camp in southern Gaza has left at least 16 Palestinians dead and dozens injured.
Israel is using tanks in the operation
The operation began late on Sunday with a series of air strikes, as a large Israeli force with dozens of tanks moved into the area.
There were reports of fierce exchanges of fire in what is a very densely crowded area.
The move came ahead of a Knesset debate on a plan to pull settlers out of Gaza.
Prime Minister Ariel Sharon told parliament he acknowledged the "pain, anger and despair" of those to be evacuated, but he said withdrawal was key to making peace with the Palestinians.
The Israeli army says it is trying to stop militants from launching mortar attacks on nearby Israeli targets.
The BBC's Alan Johnston, in Gaza, says the prospect of a possible Israeli withdrawal has escalated the violence in the territory.
Militants are keen to portray any eventual Israeli pullout as a retreat under fire, our correspondent says.
But a Palestinian Authority official condemned the operation.
"It seems to me that the deliberations in parliament about Gaza is
being translated into more Palestinian blood," Negotiations Minister Saeb Erekat was quoted as saying by Reuters news agency.
Reports from Gaza say at least four missiles were fired from an unmanned spy plane.
One hit a post manned by Palestinian security men, killing two of them.
Another targeted a Palestinian who was in the process of planting a roadside bomb, AFP news agency reported.
The attacks came as tanks assembled between the Jewish settlements in southern Gaza and Khan Younis.
Several Palestinians were killed in exchanges of fire with Israeli troops.
Palestinian security officials say there were civilians among the dead, including an 11-year-old boy.
Meanwhile two Israeli
soldiers were wounded when Palestinians fired an anti-tank
missile at their armoured personnel carrier, the Israeli army said.
The army said Israeli troops had been deployed there to stop attacks on Jewish settlements in the Gush Katif area.
A spokesman said militants had fired 28 mortars from the Khan Younis area this weekend.
The incursion came just 10 days after the end of a massive operation in northern Gaza in which at least 107 Palestinians and five Israelis died.
Operation Days of Penitence, as it was known, began on 28 September and lasted 17 days.
The head of the UN Relief Works Agency (Unrwa) in Gaza, Peter Hansen, has said that operation, which focused on Jabaliya refugee camp, was a "gross violation of international and humanitarian law".
The Israeli cabinet on Sunday approved a bill to pay compensation to settlers leaving Gaza under Mr Sharon's withdrawal plan.
Mr Sharon, who put the plan before parliament on Monday, is expected to win approval for it on Tuesday with the backing of left-wing parties.
The spiritual leader of Israel's ultra-Orthodox Shas Party, however, has ordered its 11 Knesset members to vote against the proposal.
Israel is planning to pull all its settlers from Gaza and the troops that protect them as part of the plan.
Israel will maintain control of Gaza's borders, coastline and airspace. Four West Bank settlements are also to be evacuated.