Israeli forces blew up two large apartment blocks in the Gaza Strip yesterday, destroying the homes of hundreds of Palestinians, two days after suicide bombers killed 16 people in Israel.

The army, carrying out its biggest Gaza incursion in weeks, said the operation in the Khan Younis refugee camp targeted twin five-storey buildings used by Palestinian militants for attacks on Israeli soldiers and settlers.

“We strongly condemn the Israeli aggression...against our people in Khan Younis,” Palestinian cabinet minister Saeb Erekat told Reuters, saying it would bring an escalation of violence.

International rights groups condemn Israel’s demolition of Palestinian houses as collective punishment. Israel says it is acting in self-defence against militant groups spearheading a nearly four-year-old uprising.

The overnight raid followed Israeli threats to step up strikes on militants after a double bus bombing on Tuesday in the desert city of Beersheba, the first such attacks in the Jewish state in nearly six months.

Prime Minister Ariel Sharon has vowed to press ahead with an Israeli withdrawal from occupied Gaza by the end of next year, but the latest spiral of violence could complicate his plan.

<B>Matthew Tostevin</B>