A force of 40 Israeli tanks supported by Apache helicopters entered the Palestinian city of Khan Younis and its adjacent refugee camp in the early hours of Monday morning.

Every time we witness efforts to revive the peace process and put it back on track... the Israeli Government moves to conduct such war crimes and murder innocent civilians

Saeb Erekat Senior Palestinian negotiator

The Israeli army said the operation had been launched to destroy "terrorist infrastructure" in the area - and that soldiers discovered explosives and bomb-making equipment, and made one arrest.

Hamas, the Palestinian militant group, has pledged revenge - saying in a statement that "the killing of civilians must be punished by the killing of civilians".

Funerals have been held for some of the dead, drawing large angry crowds out onto the streets.

Elsewhere in the Gaza Strip, Palestinian officials say the local head of the Palestinian riot police, Rajah Lehiya, has been shot dead.

Witnesses said he was taken from a car with his hands tied and killed by masked gunmen. There has been no word on who carried out the attack.

Palestinian police have said that Hamas was behind the killing.

Hours later, two Hamas members were killed in clashes with Palestinian police.

'Heavy resistance'

Witnesses said the Israeli forces met strong resistance from Palestinian gunmen.

Ten of the Palestinian deaths were reported to have occurred when an Israeli helicopter fired a missile near a crowd of Palestinians as they emerged from their shelters, having heard the Israeli tanks pulling out.

The Israeli military commander in the area has said that as the army withdrew, it fired on gunmen who emerged from hiding. Witnesses say the crowd was made up of civilians.

Palestinian sources say a further eight people were injured when Israeli machine gun fire and a tank shell hit a hospital to which the dead and injured were being taken after the earlier incursion.

Israeli officials say they shot at the hospital in response to mortar fire.

Senior Palestinian negotiator Saeb Erekat called on the international community to protect the Palestinians and said the raid was timed to disrupt the visit of Javier Solana, the foreign policy chief of the European Union, to the region.

"Every time we witness efforts to revive the peace process and put it back on track, like those being exerted now by Solana, the Israeli Government moves to conduct such war crimes and murder innocent civilians because the end game is to resume full occupation of the Gaza Strip and the West Bank," Mr Erekat said.

Front line

The BBC's Barbara Plett in Gaza says Khan Younis is one of the bloodiest front lines of resistance in the conflict.

Palestinian militants vowed revenge as the funerals began

She says the city, home to 100,000 Palestinian refugees, has been increasingly encircled by Jewish settlements and Israeli military bases.

It is a stronghold of Hamas, which has been behind some of the suicide attacks against Israelis.

The fresh bloodshed came Mr Solana prepared for talks with Palestinian leader Yasser Arafat.

Mr Solana condemned the Israeli raid into Gaza and expressed shock at the number of casualties.

"I think that it is even more dramatic because of the efforts that the Palestinian people were making in order to get out of the way of violence in recent weeks," he said.

Mr Solana had spent Sunday with Israeli Defence Minister Binyamin Ben-Eliezer and Foreign Minister Shimon Peres.

He is in the region to push a peace plan drawn up by the quartet - the United Nations, the United States, Russia and the EU - aimed at persuading Israeli troops to withdraw from the West Bank and the Palestinians to reform their governing authority.