The attack came despite United States warnings that such actions could harm plans to attack Iraq.
The deadly attack began shortly after midnight, when Israeli troops, backed by tanks and armoured vehicles, rolled into Khan Younis, supported by Apache helicopters.
A missile was fired at a house viewed as a stronghold of Hamas (the Islamic Resistance Movement). A gunfight then erupted after Israeli troops were met with a volley of shots from Palestinian gunmen.
Palestinian doctors and residents said eight people died when an Israeli helicopter fired a missile at a crowd of people who had left their homes at Khan Younis in the Gaza Strip, thinking the initial raid was over.
Soldiers opened fire on a hospital as it was taking in casualties and at least two were wounded, Palestinian officials said.
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