Israeli troops seized a northern Gaza town Wednesday in one of the largest strikes against Palestinian rocket squads in recent months, imposing a curfew, taking over rooftops and patrolling streets in tanks. Eight Palestinians and an Israeli soldier were killed in battles.

However, the takeover of Beit Hanoun is expected to last only a few days and does not signal the start of a wider-scale military offensive in Gaza, Israeli officials said. One plan for such a major operation would involve seizing large portions of southern Gaza for an extended period to destroy weapons smuggling tunnels from Egypt.

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

Israeli Prime Minister Ehud Olmert is to meet with U.S. President George W. Bush at the White House 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 Hamas-allied militants, and attempts by moderate Palestinian President Mahmoud Abbas to form a new Palestinian government acceptable to the West.

Click here to go to FOXNews.com's Mideast Center.

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

U.S. National Intelligence Director John Negroponte met Wednesday with his Egyptian counterpart, Omar Suleiman. Arab diplomats said Negroponte proposed 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 the capture of Shalit. Such raids are aimed both at pressuring Hamas to release the soldier and at trying to halt rocket attacks from Gaza on Israeli border towns, so far to no avail.

After midnight, dozens of tanks and bulldozers rolled in the town of 50,000 from two directions. By nightfall Wednesday, Israeli troops were controlling most of Beit Hanoun, enforcing a curfew in some areas and patrolling the streets with tanks. Snipers took up rooftop positions, and troops set up a makeshift base near a local agricultural school. Bulldozers leveled some farming areas, residents said.

Throughout the day, dozens of Palestinian gunmen exchanged fire with the Israeli forces.

Click here to go to FOXNews.com's Mideast Center.

Eight Palestinians were killed, including five militants and a policeman. At least 61 people were wounded, four critically, hospital officials said. Most of the wounded were gunmen, but they also included a woman and an 11-year-old boy, doctors said.

Dr. Jamil Suleiman, director of the Beit Hanoun hospital, said all of the hospital's blood supplies had been used up.

An Israeli soldier was also killed.

The army described Wednesday's operation as one of the largest in Gaza since the campaign began in late June.

Capt. Avital Leibovitz, a military spokeswoman, said Beit Hanoun was targeted because 300 rockets had been fired from the town since the beginning of the year, out of a total of 800 launched from Gaza.

She described the operation in Beit Hanoun as a pinpoint strike, and not a jumping-off point for a broader military campaign in Gaza.

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

"We have no intention of being dragged into any operation," said Defense Minister Amir Peretz, adding the army would stick to pinpoint raids with defined goals and would not conduct what he called "showcase operations."

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

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

Even as the offensive in Beit Hanoun continued, eight rockets from Gaza landed in Israel, the army said. No one was seriously injured. The Hamas military wing said it had no intention of stopping the rocket attacks.

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.

Click here to go to FOXNews.com's Mideast Center.