It was the bloodiest day in Gaza since last June when Hamas and Fatah forces battled each other, and the most violent clash between Israeli forces and Palestinian militants since the Mideast peace process was revived last November at the Annapolis peace conference.
The fighting started when Palestinian militants discovered a group of Israeli troops moving into the northern Gaza Strip on a mission to destroy a house used to fire rockets at southern Israel. Noa Meir, the spokeswoman for the Israeli Defense Forces says it was a routine mission.
"There is not a big operation or anything new from what we have been witnessing in the past month," she said. "We need to operate there in order to keep these snipers and terrorists away from the fence in order to keep civilians safe. There are approximately 30,000 civilians living in that area."
During the fighting, a Palestinian sniper shot and killed an Ecuadoran volunteer who was working in a potato field at an Israeli Kibbutz (communal farm) about 100 meters from the Gaza border.
Among the Palestinian militants killed was the younger son of Hamas leader Mahmoud Zahar, whose oldest son was killed several years ago by Israeli troops.
The Hamas leader called the attack the result of collusion between President Bush, Israel, and Palestinian President Mahmoud Abbas' government in the West Bank.
Mr. Abbas condemned the Israeli incursion, calling it a massacre and a slap in the face to peace efforts.
Israel's president and ceremonial head of state, Shimon Peres, said as long as Palestinian militants keep firing rockets from Gaza, Israeli troops have no choice but take measures to stop the firing.
Israeli police report a rocket fired from Gaza landed near the southern Israeli city of Ashkelon, a city of more than 100,000 people about 15 kilometers from the Gaza border.