Israeli forces have pulled back from northern Gaza, three days after the invasion, Israeli and Palestinian sources said.

"Our forces have left the Beit Lahiya area and continue to operate west of the Karni terminal, as well as east of Beit Hanun and in the industrial zone near the Erez terminal," an army spokesman in Tel Aviv said.

Israeli forces could be seen withdrawing to a security zone, a thin strip of no-man's land on the northern border of Gaza, established after Israel pulled out of the territory in a massive disengagement operation 10 months ago, Palestinian witnesses and security sources said.

Earlier, Israeli troops backed by helicopters clashed with Palestinian fighters inside Gaza near the strip's key commercial crossing.

Witnesses and medics said several Palestinians were wounded in the clash that took place on the edge of a Hamas stronghold near the Karni crossing.

An Israeli aircraft fired at least one missile at the Palestinian fighters, witnesses said.

More deaths

Seven Palestinians were killed on Friday in the continuing Israeli offensive in the Gaza Strip while another was shot dead in the West Bank.

Two of these were killed by an Israeli air strike that, an army spokesman said, was directed against "two armed cells" in the Al-Atatra area of Beit Lahiya which has been the scene of the deadliest fighting and attacks over the last two days.

"We identified hitting both of them," the spokesman said. The victims' names were not immediately released.

In another incident, nineteen-year-old Motaz al-Firi was killed by Israeli tank fire in Atatra and 20-year-old Shadi Omar, who medics said was  deaf, was shot in the chest and killed.

Earlier during the day, a Palestinian was killed in another Israeli air raid in the same area.

An 11-year-old boy died of wounds sustained in an Israeli  shooting a day earlier near Beit Hanun in northern Gaza, medics  said.

In the occupied West Bank, another Palestinian was shot  dead in clashes with Israeli forces in Nablus.

PHOTO CAPTION

Palestinian mourners carry the bodies of Ahmed Naghnghiya and Ammar Hannun, killed during an Israeli incursion into the northern West Bank town of Jenin. (AFP)