About 10 Israeli tanks backed by helicopters stormed Khan Yunis camp early on Wednesday. Bulldozers destroyed several civilian homes, leaving an unknown number of Palestinians homeless, said witnesses.
Sixty terrified families were forced to flee their homes as the tanks opened fire. There were no immediate reports of clashes or casualties.
In the occupied West Bank city of Hebron, an elderly Palestinian man died on Wednesday after inhaling tear-gas fired by Israeli occupation forces.
Another Hamas activist who had sustained gunshot wounds to the head by Israeli troops died on Wednesday in Gaza City.
Troops fired the gas to disperse protesters on Tuesday.
Israel kept pressure high on Gaza, two days after a helicopter attack killed Shaikh Yasin and nine others, including his son-in-law. Another 17 people were injured in the attack, including two of his children.
Palestinians across the occupied West Bank and Gaza Strip entered their third day of mourning for the slain resistance leader. For days Palestinians have been flocking to the quadriplegic’s home in Gaza city to pay their respects.
Meanwhile, Hamas said it appointed Abd Al-Aziz al-Rantisi as the resistance group’s new chief in Gaza.
Halima Yasin (R), Yasin's widow,
mourns with her family
Al-Rantisi has survived a previous Israeli assassination attempt.
Khalid Mishaal, a Hamas leader based in Syria, still heads the group's political bureau, the main decision-making body.
A senior Hamas official said on condition of anonymity: "The successor to Shaikh Yasin is the internal leader, while Khalid Mishaal is the head of the overseas political bureau." Mishaal has also survived an Israeli assassination attempt.
Israel has vowed all Hamas leaders are targets.
In related news, the 15-member UN Security Council held a debate on Israel’s assassination after Arab ambassadors and the United States failed to agree on a statement criticising Israel.
Ambassadors were unable to reach a compromise between the US and Algeria, representing Arab nations.
Nasr al-Kidwa, the UN Palestinian observer, opened the debate by asking the council to condemn the assassination and hold Israeli leaders responsible for breaking international law.
"We strongly condemn this new Israeli crime. We hold the occupying power and the Israeli leadership legally and politically responsible for this crime and the responsibilities for the consequences that this crime entails," he said.
Yasin's son Abd Al-Ghani is still
being treated after the attack
Alarmed, most council members said Yasin's assassination could herald more violence.
UN Secretary-General Kofi Annan condemned the killing on Monday and Palestinians and Arab countries wanted the Security Council to do the same.
US Ambassador John Negroponte refrained from sharp criticism of Israel, but said the killing of Yasin, 67, "escalated tensions in Gaza and the greater Middle East, and sets back our effort to resume progress toward peace".
Russia, China, France, Germany and others condemned attacks on both sides and called on them to fulfil their obligations under the US-backed road map aimed at ending the Palestinian-Israeli conflict.