Israeli troops searching for smuggling tunnels and explosives killed five Palestinians on Wednesday in air strikes and gun battles on the outskirts of Gaza City.

Israeli forces have been operating in Gaza City's Shijaiyeh neighborhood since the weekend and have killed a total of 15 Palestinians, including gunmen and a 4-year-old boy, doctors said.

About 17,000 residents of the neighborhood have been without power and running water since the army operation began, residents said.

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Israel launched a major military offensive in late June, after Hamas-allied militants captured an Israeli soldier in a cross-border raid.

On Wednesday, Israeli troops killed five Palestinians in two airstrikes and exchanges of fire, Palestinian witnesses and hospital doctors said. At least one of those killed was a gunman, doctors said.

Troops also flattened crops, destroyed greenhouses and chicken coops and uprooted dozens of trees, residents of the neighborhood said. The army had no comment on the report about the destruction. In recent years, troops have routinely destroyed farming areas and orchards in Gaza, citing the need to deprive gunmen and rocket squads of cover.

The army said that during Wednesday's searches, troops discovered a large smuggling tunnel stretching some 150 meters (yards) from a house toward the Karni cargo crossing between Gaza and Israel. The tunnel was to be used by Palestinian militants to attack the crossing, the army said.

The crossing has been closed for much of this year due to warnings of possible attacks. U.S. diplomats have proposed stationing international observers at Karni to improve security and expand its opening hours. Israeli and Palestinian officials have said they will consider the idea.

Also Wednesday, the head of Israel's domestic security agency, Shin Bet, was quoted as saying that Palestinian militants are smuggling large quantities of weapons through tunnels dug under the Gaza-Egypt border.

Palestinians are currently digging 20 tunnels under the Gaza-Egypt border, the Shin Bet chief, Yuval Diskin, was quoted by Israeli media as telling parliament's Defense and Foreign Affairs Committee. "Except for tanks and planes, they are smuggling everything," Diskin was quoted as telling the committee Tuesday.

The smuggling skyrocketed after Israel withdrew its troops from Gaza a year ago, Diskin said. The border is now controlled by the Palestinians and Egypt, with the help of European monitors.

Also Wednesday, some 200 children of Palestinian civil servants held a protest outside the office of Palestinian Prime Minister Ismail Haniyeh of Hamas in Gaza City. The children said they would go hungry soon if their parents weren't pay.

The Hamas government is broke, mainly due to an international freeze on aid payments to the Palestinian Authority. Despite the cash crisis, Hamas has rejected international demands that it recognize Israel and renounce violence.

As a result, Hamas has largely been unable to pay 165,000 civil servants, including some 40,000 teachers and 85,000 members of the security forces.

"We are suffering, we are starving and the government should be responsible for this," said Abed Khamid Hamos, 14, one of the young protesters at Haniyeh's office.

The children held banners saying their families cannot afford to send them to school. The teachers' union has said it would launch an open-ended strike at the start of the new school year next week.