The Popular Resistance Committees (PRC), an armed faction largely independent of Gaza's Islamist Hamas rulers, said its men battled Israeli troops who crossed the border near Khan Younis and that one militant died in an air strike.

Hospital officials said two Palestinian civilians, a father and son, suffered shrapnel wounds in the incident.

An Israeli military spokesman confirmed that troops had operated inside Gaza, calling it "a routine operational activity following an operational assessment" but giving no more details.

Previously such incursions have been mounted to clear suspected gun nests or mines laid by militants to ambush Israeli border patrols.

After the soldiers came under mortar attack, Israel's air force struck the Palestinians responsible for the launch, the military spokesman said.

Reuters