Witnesses say as many as 30 Israeli tanks have moved into the northern Gaza Strip.
The reports say the Israeli forces opened fire with machine guns as they advanced into the town of Beit Lahia and to the edges of the Jabalya refugee camp. Jabalya is considered a stronghold of Palestinian militants.
Earlier, Palestinian Planning Minister Nabil Shaath said Palestinian leaders are ready to accept an Israeli ceasefire plan, under certain conditions.
He told al-Jazeerah satellite television Tuesday that acceptance depends on Israeli forces completely withdrawing, in the near future, to positions they held before the start of Palestinian uprising 22 months ago.
Israel re-occupied seven major Palestinian centers in the West Bank in June after a wave of Palestinian attacks that killed more than 30 Israelis.
The planning minister said in return for Israel's withdrawal, the Palestinian Authority would assume responsibility for security in the vacated areas. Mr. Shaath clarified the statement by saying there is a difference between legitimate resistance to the Israeli occupation and attacks on innocent civilians.
Monday, Israeli defense minister Binyamin Ben-Eliezer and the Palestinian interior minister, Abdel Razak Yehiyeh, discussed the ceasefire plan in a rare high-level meeting aimed at stopping the fighting.
Israeli newspapers say Mr. Yehiyeh demanded the withdrawal begin in Ramallah, headquarters of the Palestinian Authority and Yasser Arafat. Israel reportedly wants to start the pullback in areas of Gaza and the southern West Bank.
Meanwhile, Israel's Interior Minister, Eli Yishai, says he intends to revoke the citizenship of three Israeli Arabs with suspected links to attacks on Israelis. The Israeli official said the loss of citizenship could deter Israeli Arabs from joining or assisting Palestinian militant groups.
Senior Palestinian officials are traveling to Washington this week for talks with top Bush administration officials. A delegation led by senior Palestinian negotiator Saeb Erekat is to hold separate meetings with Secretary of State Colin Powell and national security adviser Condoleezza Rice.