Israeli troops rolled into the northern Gaza Strip town of Beit Hanoun early Monday, sparking heavy fighting with local militants and killing at least seven Palestinians, most of them when a tank shell hit a house, medical officials said.
A mother and her four children - aged 7, 6, 4 and a 1-year-old baby - were killed when the tank shell hit the house, an official at the Hamas-run Palestinian Health Ministry said.
Witnesses said the shell was aimed at an Islamic Jihad militant, who had just launched an anti-tank missile at the Israel troops and was killed too, dpa reported.
The mother of the Abu Mo'tiq family was initially critically injured and in a state of clinical death, but died of her wounds in hospital shortly afterwards.
A Hamas gunman was also killed by a missile fired by an Israeli helicopter gunship providing cover for the ground troops.
At least 10 Palestinians were injured, three of them seriously, the Health Ministry said. An Israeli soldier was also lightly wounded.
An Israeli military spokeswoman said the army entered the town, near Gaza's northern border with Israel, because it was a "very central rocket launching area."
Hundreds of locally-made Qassam, al-Quds and Nasser rockets have been fired from Beit Hanoun and its surroundings at Israeli communities near the Gaza Strip.
Militants from the area also launched attacks at Israeli soldiers patrolling the border, and snipers have opened fire at Israeli farmers working on the Israeli side of the border fence, she said.
The military said it was checking the reports that civilians were killed in the tank shelling.
But the spokeswoman said that "when militants are acting from within a populated area, they take on themselves the risk that civilians will be hurt too. We of course do not aim at civilians."
Despite the fighting, Hamas spokesman Ayman Taha reiterated that it was willing to accept a truce in Gaza first, on condition Israel lifted its economic blockade of the strip and agreed to expand the truce to the West Bank later on.
Representatives of Palestinian factions will head back to Cairo again this week to discuss the truce with Egyptian mediators.
Israel however has rejected the truce proposal as "not serious" and as an attempt to "buy time" to regain strength and rearm before launching a new round of attacks.
Israel has in the past also rejected any calls for a truce extending to the West Bank as well, arguing it cannot afford to suspend nightly arrest raids in that occupied territory because these have in the past foiled dozens of suicide bombings, often planned by groups refusing to adhere to a truce.
The Islamic Jihad, the second-strongest Islamic militant group in Gaza and the West Bank, meanwhile has yet to "crystallize a final stance regarding the truce initiative," a local leader, Naffez Azzam, told reporters in Gaza.