Palestinians run past a burning tire to avoid Israeli sniper fire during an Israeli army incursion in Beit Lahiya, northern Gaza Strip, July 7, 2006.

Israeli troops have clashed with Palestinian militants in the Gaza Strip, broadening an offensive aimed at freeing an Israeli soldier and halting rocket attacks on the Jewish state.

Witnesses say army troops backed by helicopter gunships entered Gaza early Saturday near the Karni commercial crossing, and advanced to the Shajaiyeh neighborhood on the outskirts of Gaza City.

Israeli military officials say other troops and tanks withdrew Saturday from the northern Gaza town of Beit Lahiya and from former Israeli settlements along the coast.

Palestinian medical officials say at least two Palestinians were killed in Friday's incursion near Gaza City.

Israeli air and tank attacks killed seven Palestinians Friday during battles with gunmen in Gaza. At least 32 Palestinians and one Israeli soldier have died since Thursday.

Scores of U.S. citizens, many of Palestinian origin, left Gaza today in a convoy escorted by diplomatic officials.

Three white U.N. buses passed through the Erez crossing between Gaza and Israel.

An Israeli Cabinet minister, Public Security Minister Avi Dichter, said his country might be willing to release Palestinian prisoners as a goodwill gesture if militants first release a captured Israeli soldier, Corporal Gilad Shalit. Other officials say Israel will not negotiate a prisoner swap.

Hamas said Friday that Corporal Shalit was alive and being treated well.

Militants holding him have demanded that Israel release many Palestinian prisoners in Israeli jails.

Some information for this report was provided by AP and Reuters.