The Israeli military says it has withdrawn most of its soldiers from the Gaza Strip following an extensive operation that left six Palestinians dead. The Israeli army says 18-Palestinians were arrested during the raid.
Israeli soldiers overnight launched a new raid into the town of Deir al-Balah in response to mortar fire aimed at Jewish settlements in Gaza that caused no injuries or damage.
The army says it has now withdrawn from the area and two other Palestinian towns, although a spokeswoman says a small number of troops remain in Palestinian-ruled territory.
The raids were launched in response to the firing of a new type of rocket, called the Qassam-II, from Gaza into Israel earlier this week.
Israeli officials have expressed concern about the rockets, which have a range of up to eight-kilometers, because such weapons can reach population centers.
Israeli government spokesman Avi Pazner says the introduction of such rockets into the current confrontation is a major escalation.
"You know the Palestinians are shooting Qassam II missiles from the Gaza Strip at us," Mr. Pazner said. "This is a very serious escalation. The Palestinians started this fire and we a going to put it out."
Israeli officials say the military will continue to carry out raids until it finds the rocket factories and arrests those responsible for making them.
Palestinian Chairman Yasser Arafat told an Italian newspaper La Republicca that the threat from the rockets is not serious.
"Those missiles, they are a joke. They would not even frighten a cat," Mr. Arafat said.
Meanwhile, Palestinians confirm that Mr. Arafat threatened West Bank security chief Jibril Rajoub this week with a gun during an angry argument after militants were freed from a Palestinian jail.
Mr. Rajoub called the dispute "a tempest in a teapot," and denied there was any serious rift in his relationship with the Palestinian leader.
The disagreement occurred at Mr. Arafat's headquarters in Ramallah where Israeli tanks and troops have kept him under virtual house arrest since early December.