Israeli forces fired missiles at a Gaza refugee camp last night, killing seven people, including a leading Islamic Jihad member, Shadi Mohanna, Palestinian sources said.

Witnesses said the target was a white Subaru car in the camp, next to Gaza City. Mohanna, the Islamic Jihad field commander in northern Gaza, was killed along with his assistant, Mohammed Ghazaineh.

The attack came as Palestinians were leaving mosques after evening prayers, they said. A Palestinian Health Ministry official said seven people were killed.

A witness who gave only his first name, Nidal, said at least two missiles hit the car. "The explosion was very powerful, and flying metal from the car and the missile wounded many of the people walking in the street," he said.

Angry Palestinians demonstrated around the scene of the attack. Channel 10 TV showed footage of people waving what appeared to be a body part in the air. Palestinains pounded on the door of the morgue at the small hospital in Beit Lahiya, where the bodies were.

Israeli Prime Minister Ariel Sharon said he would not meet Mahmoud Abbas until the Palestinian leader cracks down on armed groups. He threatened a "broad and relentless" offensive against armed groups, including mass arrests and air strikes.

Meanwhile, US Secretary of State Condoleezza Rice plunged into a new round of Middle East diplomacy, pressing Palestinian leader Mahmoud Abbas to crack down on Islamic groups and planning to speak with Israeli officials.

PHOTO CAPTION

Palestinian civilians gather around the wreckage of a car following an Israeli air strike in the Jabalya Refugee camp northern Gaza Strip. (AFP)