Eight Palestinians have been killed and 40 others injured when Israeli tanks opened fire in the southern Gaza Strip, Palestinian medical staff say.

The dead include a nine year-old girl and a seventy-two year-old man in the incident, whose circumstances are hotly disputed by the two sides.

"Israeli tanks fired shells against the houses of people in Rafah refugee camp," said Ali Moussa, director of the hospital in Rafah.

But the Israelis say that they were shot at by Palestinian militants with anti-tank weapons and returned fire.

Captain Sharon Feingold said: "This is another case of Palestinian terrorists using the civilian population to hide behind and conduct terrorist activity."

Frequent clashes

The Palestinian leadership, in a statement, condemned "this new massacre by Israeli tank shells against a refugee school and houses in Rafah" and called for the international community to intervene and send observers.

The killings come just a day after Israeli Prime Minister Ariel Sharon held talks in Washington with US President George Bush, who recently asked the Israeli premier to curb the high number of Palestinian civilians killed by Israeli forces.

The Israelis say they opened fire after Palestinian militants shot at their tanks

The incident happened when Israeli troops were putting up a new lookout tower, according to the Associated Press news agency.

Palestinian youths threw stones and bottles, while militants fired on the troops, Palestinian witnesses said.

Palestinians frequently clash with Israeli troops frequently in Rafah - a militant stronghold.

The Israelis say their troops often come under Palestinian fire, while Palestinians accuse Israeli soldiers of firing indiscriminately and frequently hitting civilians.

At least six people, most of them children, were killed by Israeli forces in Rafah last week, during Israeli incursions.

Rabin anniversary

Meanwhile Israelis have been marking the seventh anniversary of the assassination of Prime Minister Yitzhak Rabin.

Although Rabin was killed on 4 November 1995, according to the Jewish calendar the anniversary falls on Thursday.

Numerous memorial ceremonies were being held around the country, but the main ceremony took place at Mount Herzl cemetery in Jerusalem, where Rabin is buried.

At an event to mark the beginning of the anniversary, President Moshe Katsav, describing the assassination, said: "The worst thing possible happened. We have to learn the lesson well, commit it to memory."

Rabin was shot dead by a right-wing Jewish extremist, infuriated with him for having signed the 1993 Oslo peace accords with the Palestinians.