GAZA, Dec 18: Israeli soldiers shot dead two Palestinian militants on Saturday on the second day of a raid in the southern Gaza Strip, medics and witnesses said.

In all, 11 Palestinians have been killed and 40 wounded in the Khan Younis incursion which Israel launched on Friday to curtail a spate of mortar attacks on Jewish settlements.

The Israeli army said soldiers shot in two separate instances at gunmen who approached their forces on Saturday. It did not say what happened to four gunmen who were shot.

In a second incident, a militant was killed when an Israeli tank fired on him after he shot off an anti-tank rocket, and three other people were wounded by Israeli fire that landed near a hospital, medics and witnesses said.

An Israeli military source confirmed the tank fire but denied it was anywhere near a hospital.

The violence was the latest in a series of incidents that shattered a brief period of calm in the Palestinian territories after the death of President Yasser Arafat in November.

Fifteen other Palestinians were wounded in Khan Younis on Saturday.

Palestinians have been unable to bury any of those killed in the raid in Gaza's second largest city because Israeli forces were in control at the local cemetery, medics said.

The Israeli army said it launched the raid on Friday after militants bombarded Israeli settlements with 30 mortar bombs and rockets in the past week, killing a foreign worker and hurting 17 other people.

Israel said it also arrested 17 militant suspects the West Bank, a territory it captured in addition to Gaza in the 1967 Middle East War.

Meanwhile militants in northern Gaza fired a Qasam rocket at the southern Israeli town of Sderot, causing no casualties but damaging a car, Israel Radio said.-Reuters