Two Israeli soldiers and seven Palestinians have been killed during an intense Israeli military offensive the Gaza Strip. At least three other Palestinians were killed in separate incidents in Gaza and the West Bank.

Israeli forces pounded Palestinian targets in the Gaza Strip by land, air, and sea.

The operation came in retaliation for two Kassam rockets fired by Palestinians in the Gaza Strip at an Israeli town in the Negev. The militant Islamic group, Hamas, claimed responsibility for the attacks.

Israeli Prime Minister Ariel Sharon warned that Israel would strike back relentlessly until Palestinians halted all attacks.

One Israeli soldier was killed in fighting near the southern Gaza town of Khan Younis, while another may have been mistakenly shot by other members of his unit.

Among the Palestinian victims was a 40-year-old woman who, according to Palestinian doctors, was shot in the back.

The home of Palestinian leader Yasser Arafat in Gaza City and a U.N.-run school for the blind were also severely damaged in the Israeli air strikes. The blasts blew out the windows in Mr. Arafat's home and collapsed a back wall. The Arafat family was unharmed. His wife and daughter live abroad, and the Palestinian leader has been confined to the West Bank city of Ramallah since December.