Ten Palestinians have been reported killed and 12 wounded during an Israeli incursion overnight into a refugee camp in the Gaza Strip.

Witnesses described a ferocious gun battle as dozens of Israeli tanks backed by helicopter gunships moved into the Bureij refugee camp in the early hours of Friday. It is not clear how many of the dead were gunmen.

Israeli media quoted the local Israeli military commander as saying that most of the casualties in the operation were armed.

Brigadier General Yisrael Ziv told reporters that five of the casualties were members of Hamas and that they had been targeted by helicopter gunships. Palestinian witnesses said all the casualties were civilians.

The Israeli forces were reported to have destroyed the home of a member of the People's Defense Committees, part of Yasser Arafat's Fatah movement.

Palestinian witnesses said troops also surrounded the home of Jamal Ismail, a suicide bomber who blew himself up along with another man in an explosive-packed boat off the Gaza coast last month. Four crew of an Israeli patrol boat were wounded in the incident. The Israeli troops have since withdrawn from the Bureij camp.

The raid came a day after Israeli Prime Minister Ariel Sharon said Osama bin Laden's al-Qaida network had established a presence in Palestinian-ruled areas of the Gaza Strip and in Lebanon.

Palestinians and Lebanese authorities denied that was the case and said Israel was only looking for an excuse to invade Gaza. Mr. Sharon provided no further details or specific evidence of al-Qaida operations. But he said Israel will take what he called "appropriate measures" to guarantee security.

Mr. Sharon says he has no doubt his country is an al-Qaida target. Israel says the terrorist network was behind last week's attacks on Israeli targets in Kenya.