Israeli helicopter gunships and naval boats rocketed at least eight Palestinian armoured personnel carriers in a wide-ranging bombardment of Palestinian security targets across the Gaza Strip early on Monday.
Helicopters hovered over a security compound 300 metres (yards) from Palestinian President Yasser Arafat's Gaza City headquarters before they opened fire, the rockets glowing red against the black sky above Gaza.
Thousands of Gaza City residents awoke as the ground shuddered from the explosions, shortly after midnight on Monday, the eve of a Palestinian national day of mourning to mark the anniversary of Israel's creation on May 15, 1948.
Tension in the area is expected to rise before Tuesday's anniversary of Israel's creation which Palestinians mark as the Nakba or "Great Catastrophe" of their uprooting from towns and villages in the first Arab-Israeli war.
At least 413 Palestinians, 79 Israelis and 13 Israeli Arabs have been killed since Palestinians launched a revolt almost eight months ago against Israeli occupation in Gaza and the West Bank, lands captured in the 1967 Middle East war.
Palestinian Public Security Chief Abdel-Razek al-Majaydeh called the missile strike "an unprovoked attack". The Israeli army said it responded to mortar attacks on Jewish settlements in Gaza and Israeli farming communities nearby over the weekend.
"The Israeli bombardment tonight in the Gaza Strip indicates that Israel is interested in escalating the tension and came without any reason," al-Majayden told Reuters.
He said at least eight helicopters took part in the attack in Gaza City, central and southern Gaza.
At least three Palestinian policemen were wounded, one in the leg. None appeared to be in serious condition. It was not immediately clear whether buildings near the armoured vehicles were seriously damaged in the attack.
The army said it targeted Palestinian armoured personnel carriers in Gaza City, near the Jabalya refugee camp and in Khan Younis in southern Gaza. A Palestinian security official said at least eight armoured vehicles were destroyed in the strike.
ISRAEL SAYS IT RESPONDED TO MORTAR ATTACKSAn army spokeswoman said the attack was the result of an "unprecedented number of mortar attacks" against Jewish settlements in Gaza and Israeli farming communities nearby in the last four days. She said 17 mortar bombs had been fired.
"The Israel Defence Forces (IDF) will continue to attack those who carry out terror and those who send them...in every way we see fit, and will not accept attacks against civilians and IDF soldiers," the army said in a statement.
U.N. Secretary General Kofi Annan accused Israel of using "excessive force" in responding to the Palestinian uprising, adding in an interview with Reuters in Brussels that talks between the two sides had produced meagre results.
"But I would hope that in time it will lead to a ceasefire amongst the two, easing of the economic restrictions on the Palestinian people and eventually getting the two to the table to discuss their issues," Annan said.
In the West Bank, at least two Jewish settlers were wounded when Palestinian gunmen fired at their cars late on Sunday.
Earlier on Sunday, Israeli bulldozers destroyed two buildings on the outskirts of the southern Gaza town of Rafah in what Palestinians said was the latest in a string of Israeli military incursions into Palestinian-ruled territory.
The army said the area was under its control according to interim peace accords and that the buildings had been destroyed because gunmen used them as cover to throw handgrenades and fire at troops patrolling the border with Egypt earlier in the day.
Israel and the Palestinians have disagreed over which areas constitute Palestinian-ruled territory along the border with Egypt. But Israel has acknowledged that it sent troops into Palestinian-ruled territory elsewhere in Gaza in recent weeks.
ISRAEL ON THE OFFENSIVE OVER SETTLEMENTSUnder attack from Palestinians and the international community for its settlement policy on occupied land, Israel hit back at demands that it freeze all Jewish settlements in Gaza and the West Bank as a precondition for a renewal of peace talks.
Israeli Prime Minister Ariel Sharon said that under interim peace deals signed since 1993, the fate of Jewish settlements is to be resolved in negotiations for a final peace treaty.
Sharon made the comments to Canadian Foreign Minister John Manley, shortly before the premier met his foreign minister, Shimon Peres, and other key cabinet ministers on Sunday to form a response to a draft report by the Mitchell committee.
The five-man committee led by former U.S. Senator George Mitchell recommended a blanket freeze of settlement construction in its preliminary report into the West Bank and Gaza violence.
Some 200,000 settlers live amidst three million Palestinians in the West Bank and Gaza Strip. Settlements, at the heart of the Palestinian uprising, are illegal under international law.
Peres was expected to discuss Israel's views on the committee's stance on settlements with European Union ambassadors on Monday. The Israelis and Palestinians have until May 15 to hand in their reservations and comments for possible inclusion in the final report.
Peres earlier reiterated Israel's pledge not to build new settlements. But he said Israel would expand existing settlements to accommodate natural growth of their populations.
Palestinian Planning Minister Nabil Shaath slammed Israel's "natural growth" explanation as "a lie". He said it was a cover to create "facts on the ground to pre-empt the outcome of permanent negotiations".