Updated

Under cover of machine gun fire, Israeli tanks rolled into northern Gaza (search) and gunships fired missiles at two buildings early Tuesday in what the military called a major drive to prevent Palestinian rocket fire from hitting Israel's border towns.

One Palestinian was killed and one wounded, security officials said.

Troops, bulldozers and tanks began crossing over the border into Gaza after amassing in Israeli territory throughout the night. Security officials predicted a prolonged reoccupation of some Palestinian areas.

Despite the upsurge in violence, Prime Minister Ariel Sharon (search) said he remains determined to go ahead with his planned withdrawal from Gaza in 2005. Addressing lawmakers, Sharon pledged to speed up the evacuation of settlers who are ready to leave voluntarily.

The Israeli actions followed a Palestinian rocket attack in Sderot, a working-class Israeli town near Gaza. The missile landed just yards from a pair of nursery schools, killing a 3-year-old boy and a 49-year-old man. It was the first time in nearly four years of fighting that Israelis were killed by rockets from Gaza.

Shortly after midnight, Israeli helicopters fired three missiles into a 16-story building housing the Hamas-linked media center Al-Jeel, injuring two people, witnesses said.

Minutes later, helicopters also fired a missile at a building housing a metal workshop in the Nusseirat refugee camp in central Gaza, witnesses said.

The army said Hamas (search) used the center to release claims of responsibility and distribute inflammatory material. The workshop was used for making home-made rockets.

Sharon met Monday afternoon with Defense Minister Shaul Mofaz and other senior security officials to plan a response.

"There is a war against terror, and we shall continue fighting terror regardless of disengagement," Israel's vice premier, Ehud Olmert (search), told Israel TV. He said Israel would have greater freedom of action after a withdrawal.

Late Monday, soldiers blew up an empty eight-story building that overlooked the army outpost attacked by Palestinian militants late Sunday. The demolition came after soldiers razed 15 nearby Palestinian homes, leaving about 60 people homeless.

In Sunday's outpost attack, militants dug a 1,000-foot-long tunnel and detonated hundreds of pounds of explosives under the outpost, killing a soldier and wounding five. Following the blast, two Palestinians were killed by Israeli fire, and two more were shot dead early Monday in Gaza.

About 2,500 Hamas supporters celebrated the outpost attack in a rally Monday evening in the Gaza refugee camp of Jabaliya, and speakers said attacks on Israel would continue.

Video footage of the digging of the tunnel and the firing of a rocket — not Monday's — was projected on a wall. The video showed two masked men crawling through a tunnel and planting explosives next to a pile of gas canisters.

Sharon's "unilateral disengagement" plan calls for the evacuation of all Gaza Strip settlements — where some 7,500 Israelis live among 1.3 million Palestinians — and four West Bank enclaves by September 2005.

Sharon has said his plan will improve Israel's security by reducing friction with the Palestinians. But more violence is expected ahead of the pullout, to be completed by the end of 2005.

Palestinian militants want to step up attacks so they can portray the withdrawal as a hasty retreat by Israel. The military, in turn, hopes to strike hard at armed groups to prevent any gloating and weaken their ability to attack Israel after a pullback.

Eran Lehrman, an Israeli military analyst, said the latest violence could complicate the pullout. "If this continues, Israel will have to hold on to parts of Gaza until it can stop the rocket attacks on Sderot," he said.

Still, he said he expects Israel to find a military solution for the attacks, allowing the pullout to proceed next year.

Hassan Al Kashif, a Palestinian political analyst in Gaza, said the militants had a few advantages, including strong motivation and Gaza's terrain. "The tiny size of Gaza and dense population makes it difficult for the Israeli army to enter the area without risking heavy losses," he said.

Sharon told a closed-door meeting of legislators that he remained committed to the withdrawal.

Participants said Sharon told them he has decided to speed up the voluntary evacuation of settlers by making advance payments on compensation available in the near future, ahead of a previous August target.

Knesset spokesman Giora Pordes said the compensation process would begin "soon," but said a timeline still isn't set.

In Sderot, anger was at a fever pitch following the rocket attack, which came as parents dropped off their children at the Lilach and Yasmin nursery schools.

The victims were identified as 3-year-old Afik Zahavi, who was on his way to nursery school, and Mordechai Yosopov, 49. Afik's mother, Ruth, was hospitalized in critical condition, and 10 other people sustained minor injuries. Sderot, about two miles from Gaza, has been a frequent target of rocket attacks. Sharon also owns a ranch in the area.