Israeli troops and Palestinian gunmen clashed in Gaza Strip's Rafah refugee camp on Friday and a military commander reported five Palestinian gunmen were killed in the fighting.

Palestinian medics reported three Palestinians were killed, including two gunmen and that 20 people were wounded including two women listed in serious condition and a nine-year-old boy with a back injury.

The clashes erupted after Israeli soldiers and about 30 tanks and armored carriers, backed by two attack helicopters, raided the camp on Gaza's border with Egypt late Thursday, in an effort to destroy tunnels used to smuggle weaponry.

"Rafah is the strategic point for fueling Palestinian terrorism in the Gaza Strip and beyond," said an Israeli army officer in the field.

"Such is the degree of recent arming by the terrorist groups in the Gaza Strip, posing a threat to Israelis both inside and out, that we had no choice but to strike deep against the tunnels," the officer said.

An Israeli army officer identified by Israel Radio as brigadier-general Ofer said soldiers shot dead five Palestinian gunmen as they met "tough resistance" when they entered the camp. He said the Palestinians had fired anti-tank rockets and hurled grenades.

Palestinian medics said two gunmen were killed, one from the Hamas militant group and the other from the Al-Aqsa Martyrs Brigades linked to Palestinian President Yasser Arafat's Fatah movement.

The medics said 20 people were wounded, including six hit by rockets fired from Israeli helicopters. Two women listed in serious condition were hit by bullets while inside their homes, the medics said.

An Israeli army spokesman said a soldier was slightly wounded in the eye by shrapnel from an explosive.

The Israeli general said the raid would go on "for as long as we need to find and liquidate the tunnels," some of which he said was used to smuggle weapons into Israel to attack civilians.

After more than seven hours fighting, none of an estimated dozen tunnels being sought had been located, but three homes suspected of hiding tunnels were destroyed, an officer in the field told Reuters.

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