Israeli helicopter gunships and tanks have fired on protesters in the Rafah refugee camp.

Palestinian officials and an Israeli reporter at the scene say at least 23 people are dead -- most of them Palestinian school children. Palestinian hospitals have confirmed 10 dead -- all of them children.

Israeli security officials, speaking on condition of anonymity, confirmed Wednesday that troops fired at least one helicopter missile and a tank shell close to a crowd of demonstrators in Rafah.

But the prime minister's spokesman Ra'anan Gissin said the helicopter fired only a flare to deflect any incoming anti-aircraft fire. Speaking on CNN, Mr. Gissin also apologized for the loss of innocent life, but said the Israeli military operation would not have been necessary if the Palestinian Authority had controlled the militants who he said use Rafah as a base for terrorist operations.

Mr. Gissin and other Israeli officials say the soldiers launched the attack only after concluding that the crowd was threatening their position. They say the incident is being investigated.

Palestinian officials say that the crowd was demonstrating against the Israeli incursion into Rafah when Israeli forces fired four helicopter missiles and four tank shells.

The officials say some 3,000 protesters were marching from the town of Rafah to the adjacent refugee camp when they came under attack.

Dozens of wounded were taken to Rafah hospital, where the staff struggled to cope with the sudden influx of patients.

The Palestinian Foreign Minister, Nabil Shaath, branded the Israeli attack a massacre and said the Palestinian leadership is considering taking its grievances before an international court.

Before Wednesday's incident, Israeli military officials said the incursion is only aimed at targeting Palestinian militants and destroying the tunnels they use to smuggle weapons and explosives from neighboring Egypt.

The officials blamed Palestinian militants operating inside Rafah for endangering the civilian population.