Israeli troops and tanks overran a town in northern Gaza, killing eight Palestinians and wounding more than 60 in their biggest push in months to try to stop constant Palestinian rocket fire.
Despite the invasion, defiant militants kept up their barrages on Wednesday. Two homemade rockets, painted in camouflage patterns of green, were filmed shooting off their simple launchers in a plume of while smoke, streaking toward Israel.
They were among eight rockets fired during the day.
The takeover of Beit Hanoun is expected to last only a few days and does not signal the start of a wider-scale military offensive in Gaza, Israeli officials said.
One plan for such a major operation would involve seizing large portions of southern Gaza for an extended period to find and destroy weapons-smuggling tunnels from Egypt.
Israel has several reasons not to launch such an offensive at the moment.
Israeli Prime Minister Ehud Olmert is to meet US President George W. Bush later this month, and likely would not want a major escalation in Gaza to overshadow the trip to Washington.
A wider offensive could also harm negotiations for the release of Israeli soldier Gilad Shalit, who was kidnapped in June by Hamas-allied militants, and hinder attempts by moderate Palestinian President Mahmoud Abbas to form a new Palestinian government acceptable to the West.
An escalation could also hinder US efforts to improve security and cut down on smuggling at the Egypt-Gaza border.
US National Intelligence Director John Negroponte met on Wednesday with his Egyptian counterpart, Omar Suleiman. Arab diplomats said Negroponte proposed Egypt allow a US-led team of multinational peace monitors to help police the border with Gaza.
He also proposed that CIA counterterrorism experts assist in efforts to halt cross-border smuggling, said the diplomats, who insisted on anonymity because of the sensitivity of the matter.
The takeover of Beit Hanoun was the latest in a series of Israeli incursions into Gaza, first launched after the capture of Shalit.
Such raids are aimed both at pressuring Hamas to release the soldier and at trying to halt rocket attacks.