(reuters) - Israeli fire hit a house in the Gaza Strip on Monday while a family was eating breakfast, killing six Palestinians, including four children and their mother, residents and medical officials said.
"They have wiped out my family," said the children's father, Ahmed Abu Meateq, putting his hands on his head in despair and weeping as the bodies were prepared for burial.
The Israeli army said aircraft fired at two Palestinian militants near the house who were carrying bags.
Based on the size of the resulting explosion, the army said it now believed that those bags were filled with bombs and other explosive devices.
"As a result of this big explosion, extensive damage was caused to a house that was near the gunmen and uninvolved civilians were hit," the army said in a statement.
The deaths in the northern Gaza town of Beit Hanoun cast another shadow over Egyptian efforts to forge a ceasefire between Israel and militant groups and end violence threatening U.S.-brokered Palestinian statehood talks.
"This aggression does not serve efforts being exerted to achieve calm, and it obstructs the peace process," Palestinian President Mahmoud Abbas, referring to Israel's military activities, said in a statement carried by WAFA news agency.
Israeli Defence Minister Ehud Barak, without giving details of the raid in Beit Hanoun, said Hamas Islamists controlling the Gaza Strip bore overall responsibility for casualties among non-combatants because gunmen "operated among civilians".
Medical officials and residents of Beit Hanoun, an area where militants frequently fire rockets at Israel, said an Israeli projectile smashed through the ceiling of a one-storey house where a family was having breakfast.
They said four children -- siblings whose ages ranged from 1-1/2 to 5 years old -- and their mother were killed in the house during what the Israeli military described as an operation against rocket launching crews and snipers.
"They were eating and they were hit," a neighbour said at the site, where chickens pecked at a bloodstained floor and cooked potatoes grew cold in a pot.
A 17-year-old Palestinian civilian who was passing by the home was also killed in the explosion, medical workers said.
Mark Regev, a spokesman for Israeli Prime Minister Ehud Olmert, called the death of the family a "tragic incident".
"We make every possible effort to prevent civilians from being caught in the crossfire," Regev said.
Separately, Israeli soldiers killed a Palestinian gunman from Islamic Jihad during fighting in the town, the group said.
Another Palestinian militant was shot dead later in the day, according medical workers.
The Israeli military said aircraft and a tank unit fired at groups of gunmen that tried to approach troops in the town but no houses were targeted.
Hamas's armed wing, the Izz el-Deen al-Qassam brigades, said it fired three rockets at the Israeli border town of Sderot in response to the Beit Hanoun killings. There were no reports of casualties in Sderot.
Hamas described deaths in Beit Hanoun as a "war crime". The group has offered Israel a six-month truce if it lifted an embargo on the territory.
After the latest violence, leaders of the Popular Front for the Liberation of Palestine, the Popular Resistance Committees and the Democratic Front for the Liberation of Palestine travelled from Gaza to Cairo for talks with Egyptian intelligence officials on a possible ceasefire with Israel.
Israel has balked at entering into a formal agreement with Hamas, which is officially committed to its destruction, but has said it would have no reason to attack in the Gaza Strip if Palestinians stopped their rocket fire.