Five members of the armed wing of the Palestinian Islamist movement Hamas have been killed in an Israeli air strike in the Gaza Strip, medics say.
Israeli aircraft reportedly targeted two vehicles in Khan Younis
The raid targeted a vehicle travelling near the southern town of Khan Younis. Minutes later, a missile was fired at a car nearby, wounding several others.
A militant from Islamic Jihad was killed overnight in an air strike in the Bureij refugee camp, reports say.
On Tuesday, UN officials said there had been no progress towards a peace deal.
The UN's humanitarian chief, John Holmes, and Middle East envoy, Robert Serry, told the UN Security Council of the worsening social conditions in Gaza and poor security in southern Israel.
The US-sponsored conference at Annapolis, Maryland, late last year set out the aim to establish a Palestinian state alongside Israel by the end of 2008.
Earlier, the Israeli military announced it had decided not to prosecute anyone involved in artillery shelling that killed 21 Palestinian civilians and wounded dozens of others in the northern Gaza town of Beit Hanoun in November 2006.
It said there was "no need" for an military police investigation because an internal inquiry had concluded the shells were wrongly targeted because of an "extremely rare malfunction" in a tank's artillery control system.
The Israeli air strike in Khan Younis on Wednesday morning killed five members of Hamas' military wing, the Izzedine al-Qassam Brigades, the group said.
Witnesses said an Israeli helicopter fired at least two missiles at a car as it passed the al-Qubba mosque near al-Aqsa University in the west of the town.
Some 10 minutes later, the helicopter fired a missile at another car in the area, wounding several other people, they added.
Israeli security sources told the Israeli newspaper, Yediot Aharonot, they had attacked two vehicles after receiving intelligence that they were carrying members of the Qassam Brigades.
Earlier, Islamic Jihad said one of its members was killed and two others injured in an Israeli air strike in the Bureij refugee camp in the central Gaza Strip.
The men were look-outs for the group's military wing, the al-Quds Brigade, according to Palestinian reports. The Israeli military has so far not commented.
The air strikes came a day after two senior UN envoys told the Security Council that no progress has been made towards an Israeli-Palestinian peace agreement since the launch of US-sponsored talks late last year.
Mr Homes said the peace process may be fatally undermined
Mr Holmes said the worsening social conditions in Gaza and the poor security situation in southern Israel, were creating a "disconnect between realities and the hopes and aims of the continuing peace talks" that he said "seemed almost total".
"Unless this chasm is bridged quickly, and the humanitarian indicators begin to rise and create some sense of hope for the future, the chances of success for the peace talks may be fatally undermined," he said.
Mr Serry meanwhile warned that ordinary Palestinians and Israelis had little confidence in the process and that the ongoing talks between their leaders needed to make "tangible progress on all core issues without exception".
"From what I have seen in several field visits, including to the West Bank, Gaza and southern Israel, ordinary people understandably have little confidence that the political process is delivering," he said.
"The Annapolis process can only be sustained by real changes on the ground."
At Annapolis, Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas agreed to seek a resolution to theconflict, resulting in an independent Palestinian state by the end of 2008.
US President George W Bush pledged to fully support the process throughout his last year in office.