GAZA CITY, Gaza Strip - Israeli tanks and bulldozers moved into the Khan Younis refugee camp in southern Gaza early Friday and began destroying buildings in response to a Palestinian mortar attack that slightly wounded 11 Israeli soldiers.
The military said the aim of the operation was to reduce the number of mortar and rocket attacks from the camp on nearby Jewish settlements. Gunfire was exchanged, but no casualties were reported.
Soldiers ordered people to leave their homes in the neighborhood known as the Austrian Project, residents said. They said 18 tanks and bulldozers entered and started tearing down buildings, adding that more vehicles were lined up outside the camp.
The 11 Israeli soldiers were slightly wounded earlier Thursday when a mortar shell exploded in a nearby army base. The military said in recent days, Palestinians have fired 30 rockets and mortars from Khan Younis.
Also Thursday, an Israeli attack helicopter fired a missile at a carpentry shop in the Rafah refugee camp on the Gaza-Egypt border, setting it on fire, witnesses said. No injuries were reported. The military said Hamas made mortars there.
The violence in Gaza contrasted with an upbeat assessment of peace prospects by Israeli Prime Minister Ariel Sharon on Thursday. He called 2005 "a year of great opportunity" which could bring a "historic breakthrough" in Mideast peacemaking.
"We have no desire to rule over you," Sharon told Palestinians.
Sharon's comments - made at a conference in Herzliya, north of Tel Aviv - were the latest reflection of increasing optimism over the long stalled Israeli-Palestinian peace process following the death of Palestinian leader Yasser Arafat last month.
Israel shunned Arafat and trapped him in his West Bank headquarters for nearly three years before he died Nov. 11 in a French hospital. Since then, Israel has been signaling clearly that it wants to work with his replacement, likely to be Mahmoud Abbas, the leading candidate in Jan. 9 Palestinian elections.
Sharon, saying it was time for Israel to take the initiative, defended his plan to withdraw all Israeli troops and civilians from the Gaza Strip and four West Bank settlements next year. He said his "disengagement" plan has removed an excuse for terror, proved Israel's willingness to make painful concessions and bolstered Israel's standing in the world.
If the Palestinians stop militant groups from attacking Israel, he said, the result could be fulfillment of their desire for a state.
Palestinian Cabinet minister Saeb Erekat, who is in charge of negotiations with Israel, said the speech contained nothing new.
"If he wants to withdraw from Gaza or anywhere else, no one will stop him. But as far as permanent settlement issues, this is dictation," he said. "We need negotiation, not dictation."
Hamas spokesman Sami Abu Zohri said Sharon's speech was "a declaration of war against the Palestinian people and the rights of the Palestinian people," adding, "our answer will be that we will move ahead in our resistance against the occupation."
Hamas has been responsible for dozens of suicide bombings that have killed hundreds of Israelis during four years of violence.