Fresh Gaza air strike kills three

The Israeli military says its raids are to stop rocket attacks by militants. It said the civilians were killed by mistake and it is investigating.

The latest attack takes the number of Palestinians killed by Israel in Gaza to more than 20 in the past two days.

Medical workers said those killed on Wednesday afternoon were all from the same family and included a teenage boy.

Earlier, Israeli troops in the West Bank killed a senior figure in Islamic Jihad's military wing.

"Palestinian blood being spilt by [Israel] will be [Israel's] curse. It will not bring you security"
Hamas leader Khaled Meshal

Hamas, the militant Islamist group which is Gaza's de facto ruler, said Israeli military actions in the last two days have scuppered a possible prisoner exchange between an Israeli soldier held by Hamas and Palestinians held by Israel.

Its Damascus-based leader in exile, Khaled Meshal, said it also jeopardised an informal ceasefire Hamas has adopted since 2005.

"I tell the... enemy: What you are committing will deprive you of anything you're betting on. There will be no exchange involving Gilad Shalit, no calm or nothing of this sort," Mr Meshal said at a news conference.

"Palestinian blood being spilt by you will be your curse. It will not bring you security. It will not prolong the existence of your entity," he added.

Military leader

Earlier, Israeli troops killed Islamic Jihad commander Walid Obeidi during an exchange of fire in the West Bank village of Qabatiya, near the northern town of Jenin, officials and witnesses said.

Two of his bodyguards were wounded and arrested, the group said.

The Israeli army said its troops had attempted to arrest Mr Obeidi, described as the head of the armed wing of the radical movement in the West Bank.

He refused to surrender and was killed in an exchange of fire, the military said.

The violence comes after Israeli and Palestinian Authority negotiators began talks on Monday on core issues in the Israeli-Palestinian conflict - borders, Jewish settlements, Jerusalem and Palestinian refugees.

The Palestinian Authority said Israel's military action was a "slap in the face" to US President George W Bush, who visited the area last week to promote peace talks.

Hamas's armed wing claimed responsibility for a heavy rocket barrage aimed at the Israeli town of Sderot on Wednesday, but there were no reports of injuries.