Israeli F-16 warplanes have bombed Palestinian security headquarters in Yasser Arafat's Gaza City compound. Three bombs hit the building, injuring at least 18 Palestinians, including civilians and security force members.
The attacks were apparently conducted in retaliation for an earlier attack by Palestinian gunmen in which two Israeli soldiers were killed.
Gaza-based UN special coordinator for the Middle East Terje Roed-Larsen said in a statement that two UN employees were injured in the strikes.
Three bombs completely destroyed the building housing the navy police headquarters and badly damaged the command centre for Arafat's elite Force 17 guards, officials said.
The Gaza raids were in retaliation for an attack in the desert city of Beersheva by two Palestinian gunmen, who pulled up in a car in front a the restaurant outside an army base and shot dead two Israeli soldiers.
The two gunmen were then shot dead by Israeli security forces.
The latest deaths raise the toll of the 16-month Palestinian intifada, or uprising, to 1,193, including 913 Palestinians and 258 Israelis.
The helicopter attack on Jabaliya also inflicted damage on a bank, two shops, kindergarten and several nearby houses. Palestinian sources said eight explosions were heard in the area.
The buildings hit in Gaza City were less than 100 metres from Arafat's residence and offices, which the Palestinian leader has not visited since Israel blasted his Gaza heliport and helicopters and confined him to Ramallah in the West Bank two months ago.
Houses in the area had their windows blown out by the blast. Palestinian officials said the house of Jordan's diplomatic representative in the Gaza Strip was also damaged by shrapnel.
Meanwhile, Israeli army officers warned that Palestinians may have entered a new level of warfare amid initial reports that home-made Qassam 2 rockets were fired into Israel for the first time ever, hitting farmland in the south.
On Wednesday, the army said it had intercepted in the West Bank a lorry carrying eight Qassam 2, rockets which are manufactured by armed wing of Hamas - the Ezzedin al-Qassam Brigades - and have a range of eight kilometres (five miles).
At dawn, soldiers backed by a dozen armoured vehicles entered the Askar refugee camp in the autonomous West Bank town of Nablus and seized several Palestinians.
Palestinian security officials said three Palestinian security officers and three civilians were wounded in the armed clashes before the army pulled out.
Palestinian hospital officials said that a 45-year-old man, Fihmi Duwaikat, had suffered a heart attack and died after firing erupted near his house.
An army statement said that troops "carried out an operation in the northeastern sector of Nablus and conducted searches to prevent a planned attack on Israeli civilians." AFP