Israeli helicopter gunships, tanks and ground troops tightened their grip Thursday on a northern Gaza town they overran a day before, killing three Palestinians in Israel's biggest push in months to stop militant rocket fire.

Defiant militants elsewhere in Gaza kept up their attacks on southern Israel, firing two homemade rockets, the army said. No injuries were reported.

One of the Palestinians killed in the clashes in the town of Beit Hanoun was a 70-year-old civilian, Palestinian hospital officials said. The other two were militants in their 20s, relatives and officials said.

Their deaths raised to 11 the number of Palestinians killed since the operation began on Wednesday. At least nine were militants.

The army said forces targeted a group of militants in Beit Hanoun before dawn Thursday, but offered no further details.

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Troops moved into Beit Hanoun on Wednesday because 300 of the 800 rockets fired at southern Israel since the beginning of the year were launched from there, the army said.

The clashes crippled the town of 50,000, with curfews imposed on some areas, and civilians in others too fearful to venture from their homes.

Helicopter gunships on two separate missions sent missiles hurtling down on the town early Thursday, but no injuries were reported. About 50 tanks were patrolling the town, backed by tanks that fired dozens of rounds into Beit Hanoun from the other side of the Israeli-Gaza border.

Snipers, meanwhile, took up position on at least a dozen rooftops in the town, while other troops carried out house-to-house searches for weapons and militants.

Militants fought back with small arms, hand grenades, rocket-propelled grenades and land mines.

Israeli tanks parked on the town's main streets, and bulldozers surrounded them with sand embankments to protect them from rocket fire. Much of the town's open space had already been razed by the army in previous operations to provide staging areas for tanks and to allow troops better visibility to monitor militant activity.

"We will not allow Beit Hanoun to serve as a launching pad for missile attacks against Israel," said David Baker, an official in the office of Israeli Prime Minister Ehud Olmert.

Other Israeli officials said the takeover of Beit Hanoun was expected to last only a few days and did not signal the start of a wider-scale military offensive in Gaza.

And on Wednesday, Israel's Security Cabinet, a group of senior ministers, rejected proposals for a major escalation against rocket squads and arms smuggling operations along the Egypt-Gaza border.

Israel has several reasons not to launch such an offensive at the moment.

Israeli Prime Minister Ehud Olmert is to meet President Bush later this month, and likely would not want a major escalation in Gaza to overshadow the trip.

A wider offensive could also harm negotiations for the release of Israeli soldier Gilad Shalit, who was kidnapped in June by militants allied with the Palestinians' ruling Hamas party, and hinder attempts by moderate Palestinian President Mahmoud Abbas to form a new Palestinian government acceptable to the West.

An escalation could also impede U.S. efforts to improve security and cut down on smuggling at the Egypt-Gaza border.

U.S. National Intelligence Director John Negroponte met in Cairo on Wednesday with his Egyptian counterpart, Omar Suleiman. Arab diplomats said Negroponte proposed that Egypt allow a U.S.-led team of multinational peace monitors to help police the border with Gaza.

He also proposed that CIA counterterrorism experts assist in efforts to halt cross-border smuggling, said the diplomats, who insisted on anonymity because of the sensitivity of the matter.

The takeover of Beit Hanoun was the latest in a series of Israeli incursions into Gaza, first launched after Shalit was captured.

Abbas condemned the Israeli operation in Beit Hanoun and urged the international community to take action to halt it.

Government spokesman Ghazi Hamad of Hamas accused Israel of deliberately keeping Gaza mired in chaos to give itself "a green light in order to continue aggression against our people."

A spokesman for Hamas' military wing, Abu Obeidah, advised residents of Sderot, a town that has come frequently under rocket fire, to flee.

"Staying there is going to put their lives in danger," he said.