Israeli army bulldozers razed 35 homes in a Palestinian refugee camp Saturday, a U.N. official said, a day after a resident of a nearby Jewish settlement was killed by mortar fire from the area.

The army said most of the demolished structures in the Khan Younis (search) camp were uninhabited and served as cover for militants.

However, after troops withdrew Saturday, dozens of Palestinians pulled clothes, utensils, books and mattresses from the rubble. One resident said he and his four children fled in their pajamas as the family's two-story house was destroyed.

Early Sunday, an Israeli helicopter fired two missiles at a suspected weapons workshop in the camp. Two Palestinians were lightly injured, witnesses and medical officials said.

The incursion began just after midnight Friday with a missile strike that killed a 55-year-old Palestinian and wounded five people. The army said the missiles targeted militants trying to launch a rocket.

Tanks and army bulldozers then drove into the camp, drawing fire from Palestinian gunmen.

The fighting took place close to the settlement of Neve Dekalim, where a Hamas (search) mortar killed 24-year-old Tiferet Tratner, an Israeli-American, on Friday. The attack marked the first time a Gaza settler was killed by Palestinian shelling.

Relatives said Tratner was born in Israel but held U.S. citizenship by reason of her parents, who immigrated to Israel from New York City in 1967.

Neve Dekalim is one of 21 Gaza settlements, with a total of 8,200 residents, to be dismantled under Prime Minister Ariel Sharon's "unilateral disengagement" plan. Sharon has argued that evacuating the Gaza settlements and four isolated West Bank (search) enclaves will strengthen Israel's hold on other areas of the West Bank where most of its 236,000 settlers live.

Sharon is to present his Cabinet Sunday with draft legislation for carrying out the withdrawal, and the bill is to be put to a cabinet vote on Oct. 24. By Nov. 3, the legislation will be presented to parliament for a first of three votes after which it becomes law.

A missile fired by Palestinians at an Israeli target Saturday fell short of its target and hit a car in the Palestinian town of Beit Hanoun in northern Gaza, blowing up the vehicle but causing no injuries, witnesses said.

In the south of the strip, soldiers fired at a group of Palestinians they said were preparing to launch an anti-tank missile at the settlement of Rafiah Yam, an army spokesman said, adding that the army fire caused the missile to explode, injuring the men. Palestinian hospital staff said four men were injured in the incident but their wounds were not life-threatening.

The army said two rockets were launched after dark Saturday, one falling in a field near the Israeli town of Sderot and other near an army post in the northern Gaza Strip. There were no casualties, the military said.

Sunset marked the end of Yom Kippur, the holiest day on the Jewish calendar, when observant Jews pray, fast and ask for forgiveness. Israel shut down for the fast, closing its borders, roads, and airports. Armed guards were posted at synagogues and soldiers enforced a blanket closure of the West Bank and Gaza.

Israeli and Palestinian officials said that among those hit by the border closure were Palestinian security personnel due to start training in Egypt, to prepare for the Israeli withdrawal. An Israeli official said the men had failed to apply for special permits exempting them from the frontier shutdown.

In Khan Younis, 35 houses — standard camp structures consisting of two rooms each — were destroyed Saturday, according to a field researcher of the U.N. Relief and Works Agency, which assists refugees.

Fathi Zaroub, a father of four, said he was at home when a bulldozer approached before dawn Saturday.

"We were forced to leave the house under intensive shooting from the sky and from the tanks," Zaroub said by telephone from the camp. "We took nothing from our belongings. We ran away in our pajamas, and we have no other refuge ... I don't know where I am going to take my children."

Some 20,000 homes have been destroyed and about 130,000 Palestinians have been made homeless by Israeli house demolitions in Gaza and the West Bank in the past four years of fighting, according to the Gaza-based Palestinian Center for Human Rights,

Israel does not provide its own figures but says it generally targets houses and buildings that serve as cover for Palestinian militants. In many areas, troops have destroyed entire blocks to widen buffer zones between Palestinian camps or towns and Jewish settlements.

Both Israel and the Palestinians have intensified fighting in Gaza. The Palestinian militants want to portray Israel's planned withdrawal in 2005 as a hasty retreat under fire, while Israel wants to pound the militant groups before leaving.