Israeli helicopter gunships fired missiles at Hamas activists north of Gaza City, killing at least one bystander and wounding more than 20 others. Officials said the target of the Israeli missile strike was a vehicle carrying a fugitive of Hamas, the Islamic Resistance Movement.
The wanted Hamas member and at least two others are reported to have fled before the missiles struck, and escaped injury.
One resident says the car's occupants jumped out and ran in different directions after one rocket hit near the front of the vehicle.
A 65-year-old Palestinian is reported to have been killed when the missiles hit close to the sidewalk, outside his water pipe shop. Several children were also wounded, including an eight-year-old boy who was said to be in a critical condition.
The operation, near the Jabalya refugee camp, was the third of its kind in less than a week in Gaza, in retaliation for a Hamas suicide bombing in Jerusalem that killed at least 20 Israelis.
Palestinian residents say Israeli F-16 fighter planes were also spotted in the skies over the Gaza Strip at the time of the missile attack.
Earlier, an Israeli gunboat shelled an area north of Gaza City.
The strike by Israeli helicopters comes just two days after Israel carried out a similar operation, killing four members of the Hamas military wing in Gaza. Late Thursday, Israel also assassinated Hamas leader Ismail Abu Shanab in Gaza City.
In response, Hamas announced an end to a unilateral ceasefire and vowed revenge, saying that Israeli cities would be flowing with rivers of blood.
Most of the Hamas leaders have gone into hiding, after Israel pledged to hunt them down, along with activists in the Islamic Jihad, another Palestinian group that has carried out numerous suicide bombing operations.