Israeli troops moved into the heart of besieged Beit Hanun yesterday as part of a major ongoing operation in the northern Gaza Strip town, witnesses and Palestinian security sources said.

Special forces moved into the centre of the town, which is home to some 20,000 Palestinians, taking over strategic positions at around 1am (2200 GMT on Saturday) before tanks and larger numbers of troops then poured in.

Both sides reported exchanges of gunfire and a 25-year-old Palestinian man was in a critical condition in hospital with bullet wounds to his chest, medics said.

Troops have effectively sealed off Beit Hanun since late last month in an effort to stop the firing of makeshift rockets by militants after two Israelis were killed in the southern Israeli town of Sderot, just a few miles (kilometres) across the border.

An Israeli military source confirmed "there are troops in several additional locations in Beit Hanun", adding there had been no casualties among the soldiers.

"One Palestinian gunman was injured after several opened fire at a force who were on patrol. The force returned fire and hit one of them and he was evacuated to hospital," the source added. There were no details of any arrests.

Late Saturday, a Palestinian youth was killed by Israeli fire in Beit Hanun, witnesses said. Seventeen-year-old Hossam Nasser, an unarmed civilian, was killed in his home by automatic weapons fire from an armoured vehicle, the witnesses said. But an Israeli military spokesman said the army was not responsible for Nasser's death.

"Our forces came under fire in the area, but they didn't shoot back because they could not identify the source," said the spokesman.

Nasser's death bring to 4,190 the number of people killed since the start of the intifada in September 2000, including 3,193 Palestinians and 926 Israelis.

On Friday an 18-year-old Palestinian teenager was killed as he tried to stop militants from planting a bomb to attack Israeli troops in Beit Hanun.

Also yesterday, Israeli troops stormed a West Bank refugee camp, opening fire towards hundreds of Palestinian youths who pelted them with stones, Palestinian witnesses said.

They said the incursion followed a report that an Israeli civilian had strayed into Qalandia camp and come under attack by residents. West Bank refugee camps have been regular flashpoints in an almost four-year-old Palestinian uprising against Israel.