Israeli helicopters fired two missiles into a crowd of suspected gunmen in a Palestinian refugee camp Wednesday, killing four people in a stepped-up campaign to root out militants in the Gaza Strip.

Two unarmed teenage boys and one militant were among the dead, Palestinian officials said.

Amid the fighting, Islamic militants traded fire with Palestinian security forces in downtown Gaza City (search) during a morning rush hour traffic stop, killing a civilian and wounding 17 people, Palestinian officials said.

On Wednesday morning, a patrol of 21 police officers pulled over an unregistered car carrying three Hamas militants that had run a red light, police officials said. When they tried to give the driver a ticket, he threw a grenade at them, slightly wounding 18 of the officers, police said.

The confrontation raised new concerns about growing chaos in Gaza.

Israel launched the offensive into Gaza late Tuesday in response to a double homicide bombing at the Israeli seaport of Ashdod (search) that killed 10 Israelis. Security officials have also said they want to strike hard at militants ahead of a possible Israeli withdrawal from Gaza.

"The extremists should know that they cannot be immune when they send terrorist groups to kill Israelis time and time again," said Israeli Foreign Minister Silvan Shalom.

Since the start of the operations, six Palestinians have been killed and 32 others wounded in a series of attacks.

In Wednesday's two missile strikes, several hours apart in the Rafah refugee camp, the army used the rare tactic of firing into a crowd of suspected gunmen during an ongoing operation. The vast majority of Israeli airstrikes are aimed at specific targets, such as cars carrying militants, based on intelligence reports.

The army said it fired the missiles after groups of militants approached troops. Ground forces had raided the camp, located on the border with Egypt, overnight to uncover tunnels used by weapons smugglers, it said.

During the searches, Palestinians fired grenades, anti-tank missiles and bombs, it said. Palestinians said the troops also demolished nine homes before pulling out late Wednesday. No Israeli casualties were reported.

In the first strike, the army said a group of gunmen tried to place a powerful bomb along a road used by the military. Two people were killed. Palestinians identified one of the men as a militant, while the affiliation of the second was unknown.

Later Wednesday, a helicopter fired a second missile at a group of militants that approached soldiers, the army said.

But residents said the crowd also included civilians. Two unarmed 14-year-old boys were killed, and four other people were wounded, residents and hospital officials said.

After nightfall, an Israeli tank fired a shell at the camp, wounding six men, Palestinians said.

On Tuesday night, a helicopter strike in Gaza City killed two Palestinians and wounded 14, including a 2-year-old girl. The army said the building destroyed in the attack housed "Islamic Jihad (search) terrorists, involved in attacks against Israelis."

However, the two people killed apparently were bystanders, Palestinian officials and hospital doctors said.

Prime Minister Ariel Sharon's Security Cabinet approved the Gaza campaign Tuesday. The offensive could include the assassinations of Palestinian militants, including leaders of violent Hamas and Islamic Jihad groups, an Israeli security official said.

That decision followed Sunday's double homicide bombing at the Ashdod seaport, the first successful attack against an Israeli strategic target in more than three years of violence. It also marked the first time Palestinian bombers were able to sneak out of the fenced-in Gaza Strip to carry out an attack.

On Wednesday, Israel partially closed the Ashdod port after discovering five hand grenades hidden in a container, security sources said on condition of anonymity. Investigators had discovered mattresses, scraps of food and drinking water in a false compartment in the container, and were looking into the possibility that this is how the bombers had entered the port, the sources said.