A Palestinian gunman has shot dead two Israelis at a Jewish settlement in the Gaza Strip before being killed by security guards.

The Israeli army says that the Palestinian gunman entered greenhouses in the Gush Katif area Wednesday and opened fire on farmers working there.

The attacker pulled out a grenade when challenged, but he was shot before he could detonate it.

The militant Islamic group Hamas has claimed responsibility for the attack.

Earlier, three Palestinian mortars landed in the Gush Katif settlement bloc without causing injuries.

The incidents followed clashes Tuesday in the Rafah refugee camp in the southern Gaza Strip between Palestinian gunmen and Israeli soldiers.

At least two Palestinians were killed and 19 more injured in that fighting.

Meanwhile, Israeli police have arrested several Palestinians near Tel Aviv's international airport, allegedly on their way to carry out a terrorist attack.

It was not immediately clear if the group had plotted to strike the airport itself.

The arrests came during an intense dragnet for suspected terrorists that shut down major highways as police set up roadblocks and patrols throughout central Israel.

The security alerts came one day after Israeli Prime Minister Ariel Sharon announced an early election, throwing the country into three months of political instability as it prepares for a poll early next year.

The Israeli parliament is due to fix a date for the elections on Wednesday and also swear in former Prime Minister Benjamin Netanyahu, who has agreed to serve as foreign minister until the elections.

Mr. Netanyahu has announced he will challenge Mr. Sharon for the leadership of the Likud Party, which is tipped to win the most seats in the next parliament.