Israeli troops and Hamas gunmen have clashed inside southern Gaza, in one of the worst exchanges of fire since Israeli forces launched an offensive in the territory to free a soldier who was abducted by Palestinian militants last Sunday.
Gunmen from the armed wing of the ruling Hamas movement said they hit an Israeli tank with two rocket-propelled grenades near the town of Khan Younis.
There were no immediate reports of casualties.
The violence came after Israel rejected demands from Palestinian militants who captured the soldier to free 1,000 prisoners from its jails.
Israeli forces today also continued air strikes and barrages of artillery in Gaza.
Israeli soldier seen by doctor: report
A Palestinian official has said that the Israeli soldier captured by militants last Sunday has been seen by a doctor.
The official said that Corporal Gilad Shalit was stable after treatment for three wounds.
The capture of the 19-year-old last weekend has sparked an Israeli offensive in the Gaza Strip to secure his release.
Meanwhile, Israel has rejected the latest demands from three Palestinian militant groups who captured Corporal Shalit.
In a statement faxed to news agencies, the groups called on Israel to free 1,000 prisoners from its prisons and end an offensive in the Gaza Strip.
Israel has demanded the unconditional release of the soldier.
Israeli has kept up an air strike since last Tuesday and a large Israeli force remains poised on Gaza's northern edge as Egyptian mediators continue their attempts to find agreement between the two sides.
