21 Palestinians and three Israelis killed in Gaza fighting

Twenty-one Palestinians were killed by army fire and at least 108 wounded as Israeli troops pushed deep into the largest Palestinian refugee camp today.

Twenty-one Palestinians were killed by army fire and at least 108 wounded as Israeli troops pushed deep into the largest Palestinian refugee camp today.

Three Israelis - two soldiers and a woman jogging in a Jewish settlement - were killed.

The highest single-day Palestinian casualty count in four months came after a Palestinian rocket killed two children in an Israeli border town.

Israel's defence minister decided after consultations with army commanders to widen the military campaign and send more troops to Gaza, a security official said.

His plan for a large-scale operation was to be presented to Prime Minister Ariel Sharon and his inner Cabinet later in the day. Previous Israeli military operations in northern Gaza - including 12 major ones - have not been able to stop the rockets.

The heaviest fighting raged in the Jebaliya refugee camp, just north of Gaza City. In the single deadliest incident, an Israeli tank fired a shell toward a group of Palestinian gunmen, killing at least seven people and wounding 23, many of them critically with loss of limbs.

The local Kamal Adwan hospital, which only has 25 beds, was overwhelmed as ambulances brought in the wounded. Two scorched bodies were carried in on stretchers. Two legless men were treated on the blood-covered hospital floor.

Ahmed Salem, 10, who was wounded by shrapnel in the leg, said the tank shell was fired from a tank at a U.N. school near Jebaliya's market. "I was hit and fell to the ground. The man lying next to me had no head," he said.

Hospital director Dr. Mahmoud Asali said that all the injured were in critical condition. "Some have lost their eyes. Others have lost limbs, and the martyrs are completely disfigured," he said, adding that at least four of the wounded were under the age of 14.

The army said soldiers fired the shell after gunmen in the market fired an explosive device and an anti-tank shell in their direction. Three soldiers were lightly hurt by the explosives, the army said.

Bulldozers also demolished 15 homes along a relatively narrow road leading into the camp, witnesses said, apparently to widen it and allow more tanks to get through. Armored vehicles avoided the booby-trapped main street in the camp.

"A bulldozer entered our living room and demolished half the house," said Hussein al-Jamal, a resident of the camp's Block 2, adding that he and his family fled, along with many of his neighbors.

On Wednesday, Hamas militants had fired a rocket at the Israeli border town of Sderot despite the massive army presence in Gaza, killing two children, ages 2 and 4, as they played on a sidewalk at the start of the Jewish holiday of Sukkot.

Continued rocket fire could turn public opinion against Sharon's plan to remove all settlers and soldiers from Gaza in 2005. His opponents argue that a withdrawal would only encourage Palestinian militants to stage more attacks.

Palestinian militants have intensified attacks in recent months in hopes of portraying the Israeli withdrawal as a retreat under fire. Israeli troops, in turn, have stepped up military operations to pound militant groups before the pullout.

On Wednesday morning, dozens of Israeli armored vehicles took up positions in northern Gaza, including the towns of Beit Hanoun and Beit Lahiya and the edge of Jebaliya, to prevent any rocket fire during the weeklong Sukkot holiday. However, later in the day, Hamas fired the deadly rocket at Sderot.

Before dawn Thursday, two Hamas gunmen attacked an Israeli observation post overlooking Jebaliya, killing an Israeli soldier before being killed by return fire.

Close to the border with Israel, gunmen shot and killed an Israeli woman jogging in the Jewish settlement of Elei Sinai. Another Israeli, who tried to administer first aid, was also killed, military sources said. Two Palestinian gunmen were shot dead in the attack, for which Hamas claimed responsibility.

The Israeli raid of Jebaliya began Thursday morning, with armored vehicles driving into the camp of more than 100,000 under cover of heavy machine gun fire.

Dozens of masked Palestinian gunmen fired at the tanks, and hundreds of residents rushed into the streets, many throwing stones. Some of the gunmen were seen laying booby traps, while several children tried to climb onto tanks.

An Israeli bulldozer tore down the outer wall of a U.N. school close to the camp's central market, and soldiers took up positions inside, signaling that the army intends to stay in the heart of the camp for some time.

It marked the first time in four years of fighting that Israeli troops pushed deep into the camp. In previous raids, they would enter outlying neighborhoods, but avoided longer stays, apparently for fear of entanglement.

A masked Hamas gunman carrying a rocket launcher said he expected Israeli soldiers to leave soon. "Jebaliya will be a burial ground for their soldiers," he said on condition of anonymity. "They will run away and we will stay."

Former Gaza security chief Mohammed Dahlan, seen as a key player in running Gaza after an Israeli withdrawal, said in a statement that the Israeli operation "will result in a bloodbath on both sides because the Palestinian people cannot remain silent in the face of this aggression."

Gideon Meir, an Israeli government spokesman, said that Israel has an obligation to protect its citizens. "Once again we are witness to a brutal terror attack aimed at hurting innocent women and children ... on the eve of a Jewish holiday," he said.

Israeli helicopters dropped Arabic-language flyers over northern Gaza, telling residents that "terrorism pushes you further into a life of misery and poverty." The leaflets also had a drawing of a monster, with the word terrorism written on it.