An Israeli occupation army tank fired a shell into a two-story building in Bureij refugee camp in the central Gaza Strip, killing five people and wounding at least 10, witnesses and hospital officials said Friday. Israeli occupation troops moved into the camp early Friday with tanks backed by helicopters. The army said it was conducting a targeted operation.

Inside the camp an intense gunbattle broke out between Israeli occupation troops and Palestinian resistance men, spurred on by calls through mosque loudspeakers urging people to come out and fight the occupation troops.

Kamal Baghdadi, the mayor of Bureij refugee camp, said a tank shell was fired at a building.

Hassan Safi, 49, said he was 300 yards away in his home when the shell hit.

"I rushed with my sons to the place, which was all destroyed. I myself took out two people, the helicopter was firing with machine guns at us, making it difficult to move," Safi said.

The occupation army had knocked out the electricity source for the camp and ambulances were having difficulty reaching the area.

The bodies of five people reached Al Aqsa hospital in nearby Deir el Balah, according to Ahmed Rabah, a doctor at the hospital, and Baghdadi, who was still at the site of the destroyed building.

ARAB OFFICIALS DENY SHARON'S ALLEGATIONS AL-QAEDA IS OPERATING IN GAZA & LEBANON

A Palestinian official denied charges by Israeli prime minister, Ariel Sharon that Al-qaeda is operating in Gaza and said Israel was looking for an excuse to invade Gaza, where it often launches raids to hunt resistance activists fighting for independence. Lebanon's President denied similar charges made by Sharon about Lebanon describing the allegations as "fraudulent."

Rashid Abu Shbak, chief of Palestinian Preventive Security in Gaza, dismissed Sharon's charges and said Israel knew there were no al Qaeda operatives or cells in the small strip of land Israel occupied in the 1967 Middle East war.

Lebanese President Emile Lahoud said Sharon's remarks were "fraudulent."

Sharon said on Thursday Osama bin Laden's al Qaeda network had established a presence in Palestinian-ruled areas of the Gaza Strip and in Lebanon.

Sharon also said he did not necessarily agree with a U.S.-backed call for a Palestinian state by 2005 and officials said he had approved plans to extend a security fence aimed at preventing Palestinian attacks within the Jewish state.

In Washington, the State Department declined to comment directly on Sharon's remarks and said the United States remained committed to President Bush's vision of Israeli and Palestinian states living side by side in peace.

Sharon spoke about al Qaeda a week after bombers killed 10 Kenyans and three Israelis at an Israeli-owned hotel in the Kenyan resort of Mombasa and missiles narrowly missed an Israeli airliner taking off nearby.

He told a meeting with news media editors that Israel was "undoubtedly a target for attacks" by al Qaeda, a multinational, fundamentalist Muslim group which Israeli and U.S. officials have blamed for the Kenya attacks.

"We have information about the presence of a few of them (al Qaeda members) now in the Gaza Strip," Sharon said. "We know they are in Lebanon and cooperating closely with Hizbollah." He gave no details.

An official with the Hizbollah resistance group in Lebanon refused comment. Hizbollah fought Israel's 22-year occupation of south Lebanon which ended in 2000. Last month, Hizbollah urged Palestinians to carry out more resistance attacks.

PHOTO CAPTION

Two Palestinian boys play with a toy gun next to Damacus gate in Jerusalem's Old City during the first day of the Eid, the feast that marks the end of the Muslim holy month of Ramadan Thursday Dec. 5, 2002.(AP Photo/Brennan Linsley)