Israel launched its first ground military operation inside the Gaza Strip since it pulled out of the region nearly a year ago, killing three members of a Palestinian rocket squad and a policeman in a fierce battle, the Israeli army said.

The gunfight between Israeli commandos and Islamic Jihad militants took place nearly two miles inside northern Gaza, from where militants have fired hundreds of homemade rockets at Israeli border communities in more than five years of fighting.

The operation marked a change in army tactics since the September pullout and signaled a further escalation in cross-border fighting.

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Amos Harel, the military affairs reporter for the Haaretz daily, said the commandos sneaked into Gaza before dawn and set up an ambush in the area of the former Jewish settlement of Dugit. They opened fire when an Islamic Jihad rocket squad reached the area, he said.

The military would not comment on whether troops had been lying in wait for the militants.

Three Islamic Jihad members were killed, as well as a member of Palestinian President Mahmoud Abbas' security force. The force has a post in the area, and it was not clear whether policemen were involved in the fighting.

Israeli helicopter gunships joined the battle, firing missiles, and Palestinian security officials said Israeli navy divers were also part of the operation. The troops left Gaza after five hours of fighting.

The army said that in recent months, troops had gone a few yards into Gaza on occasion to clear mines near the Gaza-Israel border fence, but that Tuesday marked the first ground operation inside the Palestinian territory against rocket squads.

Since the Gaza pullout, army officials have repeatedly said that the only way to halt rocket fire against Israel is to re-enter Gaza, something Israel has been reluctant to do. The army said after Tuesday's incursion it would use all means to defend Israeli citizens against rockets.

Elsewhere, Israeli troops killed three militants in separate arrest raids in the West Bank. Two of those killed were from the Al Aqsa Martyrs' Brigades, a violent offshoot of Abbas' Fatah party, and one was from Islamic Jihad.

Israeli Interior Minister Ronnie Bar-On also issued an ultimatum to three Hamas legislators and a Hamas Cabinet minister who live in Jerusalem, telling them they must either quit their posts or face expulsion to the West Bank within 30 days.

Hamas legislator Mohammed Abu Teir said he and his colleagues would fight the decision in Israel's Supreme Court. "How can Israel call itself a democracy and do this?" Abu Teir told Israel Radio.

Expelling Palestinians from Jerusalem on political grounds is unprecedented. It reflects the heightened tensions caused by the Hamas victory in January parliamentary elections and its formation of a government in March.

Israel has declared the Hamas regime a "hostile entity" and is leading a drive to cut off all funding to the Palestinian Authority, which has led to widespread hardships. Israel, the United States and the European Union list Hamas — which is officially sworn to Israel's destruction — as a terrorist organization.