An Israeli helicopter fired missiles at a Gaza City building Tuesday, killing two Palestinians and wounding 14, including a 2-year-old girl. The attack was the start of a new Israeli offensive sparked by a homicide bombing at an Israeli seaport.

The missile strike came just hours after Israel's Security Cabinet (search) approved a new campaign of stepped-up raids into Gaza cities and towns and killings of Palestinian militants, including leaders of the violent Hamas (search) and Islamic Jihad groups, an Israeli security official said.

Throughout the day Tuesday, Israeli tanks were seen mobilizing around the volatile coastal strip, while Palestinians lined up at bakeries and groceries to stock up on food in case of new Israeli assaults.

The Israeli military said the building destroyed in the missile strike housed "Islamic Jihad terrorists, involved in attacks against Israelis."

Islamic Jihad (search) officials confirmed one of those killed was a member of the group but said the main target, area commander Mohammed Kharoubi, escaped. They would not say if Kharoubi was hurt in the attack. Israel Radio said he had been lightly wounded.

The second man killed was a police officer returning home from work, witnesses and hospital officials said.

Islamic Jihad militants were in the area at the time but escaped, the militant group said. A 2-year-old girl was among the 14 wounded.

Bilal Wadif, 22, was walking by when he saw three missiles hit the building. Wadif ran into the burning house to help pull out the injured, he said minutes later at the hospital, his pants stained with blood.

"It was terrifying," he said.

Outside the building, Palestinians clamored for revenge, and Palestinian militants said the raid would not go unanswered.

"If [Israeli Prime Minister Ariel] Sharon has declared a war today, we accept the challenge and we will fight," said Abu Qusay, a leader of the Al Aqsa Martyrs' Brigades (search), loosely linked to Yasser Arafat's Fatah movement.

Palestinian Cabinet Minister Saeb Erekat (search) denounced the air strike. "What's needed to break the vicious cycle of violence is not the mentality of revenge but the mentality of reconciliation and negotiations," he said.

The Israeli decision followed a double homicide bombing Sunday at the port in Ashdod that killed 10 people. The bombing was the first successful attack against an Israeli strategic target in more than three years of violence, and it marked the first time that Palestinian bombers were able to sneak out of the fenced-in Gaza Strip to carry out an attack.

Israeli officials were infuriated.

"Israel is compelled to take strong defensive measures against the Hamas and Islamic Jihad, because those two organizations decided to step up attacks against Israel," government spokesman Avi Pazner (search) said. "We will do whatever is in our power to prevent these attacks and to neutralize the threat before it gets into the heart of Israel."

In Washington, State Department spokesman Adam Ereli said Israel was the victim of terror and had a right to defend itself, although it should be sensitive to the consequences of its military actions.

Israel routinely raids Palestinian towns in Gaza and targets militants, but the new offensive was to be more sustained and last several weeks, an Israeli security official said on condition of anonymity. The offensive was also meant to weaken militant groups ahead of a possible Israeli pullout from Gaza, the official said.

Sharon has said if peace talks remain stalled, he might order a pullout from Gaza, removing settlements, while imposing a boundary in the West Bank. Violence in Gaza has been increasing, with both sides intent on portraying a pullout as a victory.

The army will also send more soldiers and tanks to the strip for a series of raids of militant strongholds, the official said.

Said Siyam, a Hamas spokesman in Gaza, warned that Israel would pay a heavy price for military actions in the strip.

Families of Palestinian militants who had carried out attacks against Israelis, including the Ashdod bombers, evacuated their homes ahead of the expected Israeli retaliation. Palestinian security forces left their headquarters as well, fearing they would be targets.

The Ashdod bombing shook Israel's security establishment because of the relative ease with which the attackers got into the heavily guarded port. The port, which has large storage tanks of fuel and hazardous chemicals, is considered a "strategic" target, meaning an attack there could lead to hundreds, if not thousands, of casualties.

Early Tuesday, Israeli troops blew up two abandoned buildings on the edge of Gaza City that the military said had been used to fire missiles repeatedly at Israeli motorists. The buildings, which belong to a Palestinian university, overlook a road frequently used by Israeli settlers. On Monday, an anti-tank missile struck a bus carrying Israeli school children, causing damage but no injuries.