The raid came a day after Defense Minister Shaul Mofaz vowed to step up the military's assault on Hamas militants. On Sunday, Israeli forces invaded Khan Younis, killing three Palestinians, one of them a nine-year-old boy.
The focus of the raid was Bureij, a Hamas stronghold, where soldiers blew up two houses after demanding the residents leave, Palestinian witnesses said. The army confirmed an operation was underway but did not immediately give details.
Israel says it demolishes the homes of militants to deter Palestinians from attacking Israelis. Palestinians condemn the action as a violation of international law and say it is collective punishment.
In Bureij, a 14-year-old boy was shot and killed during a gun battle and a pregnant woman died when her house collapsed from the force of a nearby blast. The bodies of the dead remained in the camp, while the wounded lay in the street untreated, Palestinian witnesses said.
The army increased its focus on the Gaza Strip two weeks ago after Hamas blew up an Israeli tank, killing its four-men crew. Days later, a Palestinian gunman killed a soldier, furthering raising Israeli ire and determination to strike back at the militant groups.
Marwan Jaber, 45, a Bureij resident, described the battle scene that unfolded in front of his house. Lying in a hospital bed, he said he tried to help an injured teenager, when he himself was shot in the shoulder.
"I saw a number of people being hit by shrapnel and bullets. I was out of my mind when I saw body parts dispersed in the area. The scene was horrible," Jaber said.
Dr. Moawia Hassnen, chief of emergency services in the Palestinian Health Ministry, accused the army of targeting civilian homes and ambulances. He said medical personnel were denied access to treat the wounded.
"What's happened is a war crime," Hassnen said. "This brutal act will increase the number of people killed and threaten the lives of all the injured people."
Israeli forces arrested two Hamas leaders among them Mohammed Taha, a Hamas founder and leader of the group in Bureij. Ismail Haneyya, a senior Hamas leader in Gaza, said the group would hold Israel responsible if Taha was harmed.
"Hamas will continue along the road of jihad and resistance against the Zionist occupation regardless of the sacrifices," Haneyya pledged.
Israel has often hunted down and killed Hamas militants, striking them down with missiles fired from helicopters, organized raids on their homes or hideouts and, at times, with bombs planted by soldiers. Such actions are condemned by the Palestinians as assassinations. Hamas carries out bombings and attacks to avenge the killings.
In Nablus, Israeli troops renewed their operation in the West Bank city's Casbah or Old City blocking the entrances to the area and taking over homes and buildings to use as lookouts, residents said.
The army has been operating in the city which it calls a "hornet's nest" of militants on and off for several weeks. There was a lull in activity in the past week.
Soldiers conducted house-to-house searches for militants, but residents said no fighting erupted and the troops did not damage homes or property, as they have done in the past.
In a village near the West Bank town of Jenin, the army said it demolished the home of a Hamas militant. The army said the militant, Fathi Hatzib, drove a suicide bomber to the Park Hotel in Netanya, where he blew himself up on the eve of Passover last year, killing 29 people, the deadliest attack in more than two years of fighting.
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