At least seven Palestinians, including two civilians were killed Thursday during heavy fighting in the northern Gaza Strip. Ten Palestinians and one Israeli soldier were killed on Wednesday, in the heaviest fighting in Gaza since Israel withdrew from the territory last year.

Israeli soldiers walk past a line of Armoured Personnel Carries parked at a temporary staging area along the border with the northern Gaza Strip, November 2, 2006

About 50 tanks and armored vehicles, backed by helicopter gunships, have sealed off the town of Beit Hanoun where Israeli troops conducted house-to-house searches for weapons, homemade rocket launchers, and Palestinian militants.

A number of clashes were reported with small groups of militants attacking Israeli troops. Palestinian militants also fired several Qassam rockets into Israel. Israeli troops say their operation in Beit Hanoun, a town of about 50,000 people, just south of Israel's Gaza border, is designed to stop the rocket attacks.

Israeli officials say Palestinian militants have fired 800 of the homemade Qassam rockets at Israel since the beginning of the year, with 300 being fired from Beit Hanoun. Binyamin Ben-Eliezer, a Labor Party Cabinet Minister in Israel's government cautioned that Israel should have concerns about getting bogged down in Gaza.

Ben-Eliezer says Israel has to worry about repeating the mistakes of its two-decade occupation of parts of southern Lebanon. He says maybe a political solution or a political-military solution can be arrived at to end the crisis in Gaza.

Israeli newspapers say the operation in Beit Hanoun is expected to last several more days. A wider offensive in Gaza is not expected, because that would complicate efforts to free an Israeli soldier held by Palestinian militants - and indirect negotiations aimed at freeing two Israeli soldiers held by Hezbollah militants in Lebanon.

Hamas militants in Gaza have vowed retaliation for the military strikes, warning residents in southern Israel to flee to avoid being struck by rockets.

Meanwhile, U.S. Assistant Secretary of State David Welch and U.S. National Intelligence Director John Negroponte, as well as other senior diplomats, held talks with Israeli officials.

Mr. Negroponte traveled to Jerusalem from Cairo, where, according to news reports, he urged Egyptian officials to accept U.S. support for policing Egypt's border with Gaza - which Israeli officials say is being used by Palestinian militants to smuggle weapons into the Gaza Strip.