Israeli Strike Kills Two in Northern Gaza

Two Palestinians were killed and one was wounded on Thursday in an Israeli air strike in the northern Gaza Strip, a spokesman for the Hamas emergency services said.

The Israeli military confirmed the strike in a statement that said the air force had targeted a "terrorist squad" which had opened fire on troops in an area near Gaza's northern border with Israel.

Emergency services spokesman Adham Abu Selmiya said the attack, which took place in al-Sudaniyya near the seafront, had killed two and left a third person in moderate to serious condition.

"The martyrs were taken to Kamal Adwan hospital in Jabalia," he told AFP, referring to a nearby town.

The attack occurred as both sides reported an exchange of fire between troops and gunmen near the border as an Israeli helicopter hovered overhead.

The strike came after several days of calm in and around Gaza following a spike in violence at the weekend which left 12 Palestinians and an Israeli dead.

Palestinians groups say they are observing an Egyptian-brokered truce agreement but have reserved the right to reply to any Israeli fire.

Israel says it will continue to act against any groups poised to fire rockets across the border.