The Israeli army killed two Palestinians during an incursion into the West Bank town of Jenin, Palestinian sources said.
One of the dead was a member of the Al-Aqsa Martyrs Brigades, an armed offshoot of Palestinian leader Mr Yasser Arafat's Fatah group. The other was a member of the Palestinian security services.
Earlier, Israeli helicopter gunships had destroyed a metal-working factory in the Gaza Strip in apparent retaliation for Palestinian attacks that wrecked an Israeli tank and killed two soldiers yesterday.
The Israeli army also blocked two main junctions in the Gaza Strip to Palestinian traffic, dividing the area into three separate zones, a measure it has taken in the past after attacks on its soldiers.
The army said the foundry was targeted "because it was used by a terror organisation to make ammunition." But the owner denied the allegation, saying his workers built parts for electric generators.
Witnesses said helicopters fired three missiles at the small factory, caving in the roof. The building was empty of workers at the time and no casualties were reported.