Israeli helicopters destroyed a three-story building in a crowded district of Gaza City (search) on Friday, gutting a structure owned by the family of a young mother who blew herself up in a homicide bombing.

Palestinian medics said two people were injured when a missile slammed into the building's middle floor, sending a fireball high into the night sky. The building was vacant.

Israel said a metal shop in the building was used to build bombs for the militant organization Hamas (search). Palestinian officials said it was a factory for car batteries.

Both sides said the shop belonged to the family of Reem Raiyshi, a 22-year-old mother of two who killed herself in a January attack at the Erez Crossing (search), the checkpoint between Israel and the Gaza Strip.

That attack killed three Israeli soldiers and a security guard. Raiyshi said in a video made before her mission: "I always wanted to be the first woman to carry out a martyr attack, where parts of my body can fly all over. That is the only wish I can ask God for."

Earlier, Israeli troops fired on Palestinians mourning a militant leader in the Gaza Strip, killing a 12-year-old boy, hospital officials said, while Palestinians fired a salvo of missiles at an Israeli town.

The rocket attack came hours after Israeli forces expanded their pre-emptive operations in northern Gaza to end the harassment of the town of Sderot and Israeli settlements in Gaza.

The escalation of attacks by the crude, homemade Qassem rockets threatens to complicate Prime Minister Ariel Sharon's plans to withdraw troops and Jewish settlers from the Gaza Strip before October 2005. About 60 rockets have hit Israeli settlements this month.

Palestinian officials said Israeli soldiers killed the boy and wounded five others during the funeral of a militant killed by an Israeli missile Thursday. They said the boys were throwing stones at Israeli troops guarding a nearby settlement.

Israeli military officials said they fired on about 70 Palestinians who split away from the funeral procession and ignored warning shots as they entered a no-man's-land near an Israeli security fence.

Thousands of Palestinians attended the funeral of Amr Abu Suta, who headed the Ahmed Abu Reish Brigade, a faction that broke Yasser Arafat's Fatah movement. Abu Suta was on Israel's most-wanted list, accused of involvement in the 1992 killing of three Israeli soldiers and several other fatal operations.

The mourners filled the streets of Rafah in the southern Gaza Strip, and dozens of people fired assault rifles in the air as they carried the coffin to the cemetery.

Also Friday, Israeli troops shot and killed several Palestinians near the town of Bureij who were planting explosives near an Israeli crossing with the Gaza Strip, Israeli military officials said. Both Israel Radio and Army Radio reported four Palestinians died.

Before daybreak, Israeli troops moved to the outskirts of Beit Lahiya, a town near Gaza's northern edge, expanding a monthlong operation aimed at stopping rocket attacks.

Shortly afterward, militants fired four Qassam rockets across the border. Two landed in residential areas of Sderot, causing panic but no injuries, the army spokesman said, while the two others hit open areas.

The army moved into Beit Hanoun more than a month ago after two Israelis were killed in Sderot, the first fatalities of the rocket fire in nearly four years. More than 900 acres of Palestinian land has been bulldozed to clear areas that had been used as launching pads, the Haaretz newspaper reported.

Israeli and Palestinians officials are to meet this weekend to discuss coordinating the Israeli pullout next year from the Gaza Strip, participants said.

The officials included Palestinian Cabinet Minister Kadoura Fares and at least two members of Sharon's Likud Party, Army Radio reported.

"We want to have a pragmatic dialogue on where things should go now, regarding all our relations," said Etti Livni, a parliament member from the Shinui Party, a member of Sharon's coalition.

Israel is leaving behind military camps and 21 civilian settlements in Gaza, and it was uncertain what will be demolished and what will be handed over intact.