A group of British politicians were shot at by Israeli soldiers during a UN-supervised fact-finding mission, they have claimed.
Crispin Blunt said UN officers advised them to leave the area
The cross-party group, including MPs Huw Irranca-Davies and Crispin Blunt, was on a visit to Rafah in Gaza, where UK student Tom Hurndall was killed.
Liberal Democrat peer Baroness Northover said one bullet hit a wall about 10ft above her head.
"I thought 'they're trying to kill us'," she told BBC News Online.
Speaking from the West Bank city of Hebron on Saturday, the peer said they would be demanding an explanation and apology from the Israeli ambassador to Britain when they returned on Monday.
The Israeli embassy in London said it had not received an official complaint from the UN or the politicians, but said it was checking with the military.
The Israeli Army later said it was not aware of the alleged shooting but would investigate.
It emphasised that the delegation of politicians did not
coordinate their arrival with either the foreign ministry
or the defence ministry.
The Israeli Army says a formal complaint was only received after the claim was made in the media.
A source said it was unclear whether shots had been fired, and if so by whom.
He said the exchange of fire between both sides was
"commonplace" in the area and had not necessarily come from Israeli forces.
The group had emerged from their UN vehicle at around 1600 (1300 BST) on Thursday when they heard a burst of machine gun fire, said Conservative MP Crispin Blunt.
They were visiting the site of the demolition of Palestinian homes by the Israeli authorities, near the spot where Mr Hurndall was killed last April.
Mr Irranca Davies said the first he knew of what was happening was when he heard the rattle of a machine gun.
"We withdrew to the jeeps and as we were getting in, it was followed by some pretty accurate warning shots which fired above our heads and hit a building. It was a pretty clear indication they didn't want us there.
"It was extremely frightening.
"I will be taking it up with Jack Straw and the Foreign Office because it's simply not acceptable," he added.
A Foreign Office spokesman said it was in touch with the MPs and seeking an explanation from the Israeli Government.
Lady Northover told BBC News Online when shots rang out she wondered if she would make it back to their vehicle.
"Our UN companions later said that if they had wanted to kill us they would have, but it was certainly our group they were targeting and seeking to scare. We were the only adults around.
Labour MP Huw Irranca-Davies was part of the delegation to Rafah
"One of the most perturbing things was that we had been surrounded by children as we arrived, but they were not terrified by this - it's obviously a fairly common occurrence," she added.
In an earlier statement Lady Northover, the Liberal Democrats' international development spokesperson in the Lords, said the incident had shown her "the indiscriminate violence faced by Palestinians on a daily basis".
She and Mr Blunt said the action may have been an attempt to stop the group seeing the effect of Israel's policy of demolishing Palestinian housing in Gaza.
The group's fact-finding visit was arranged through the British consul-general in Jerusalem.
Tom Hurndall, 22, from Tufnell Park, north London, was shot in April last year while trying to help Palestinian children to safety in Rafah.
An Israeli soldier is being tried for the killing.