The Israeli army says its solders have shot dead three Palestinian gunmen in a confrontation in the southern Gaza Strip.
The military wing of the governing Palestinian party, Hamas, has said it will attack targets inside Israel if Israel does not end its Gaza offensive.
However, the Israeli prime minister Ehud Olmert has ordered his military to intensify its action there.
Israel launched its assault on Tuesday night, to try to free a 19-year-old soldier captured a week ago.
Israel has targeted Palestinian government buildings, bridges, a school, a university and a power plant.
Today, an Israeli air strike destroyed the offices of the Palestinian prime minister Ismail Haniya in Gaza City.