Palestinian medical sources on Wednesday said the air strike wounded another seven, two of them seriously.
Among the dead was Faraj Abu Jazar, a 22-year-old member of the Popular Resistance Committees. A 45-year-old civilian, Mahmud Abu Nahil, was also killed.
Security officials said that shortly after the attack, about 17 Israeli tanks poured into the area.
Palestinian fighters meanwhile had taken up battle positions against the invading Israeli occupation forces.
"We prepared ourselves and said farewell to our families. If they come in, it will be a battle to the death," one fighter said.
Earlier on Tuesday, two more Palestinians were killed when an Israeli helicopter fired three missiles into a house near Gaza City.
At least 11 other people were wounded in the raid on Tuesday, three of them seriously, Aljazeera's correspondent in Gaza, Hiba Akila, said.
Two children were among the injured when three rockets slammed into a house close to Al-Shati refugee camp on the outskirts of the city.
An Israeli military spokesman said members of Islamic Jihad had been the target of the attack.
"In an operation this evening in the northern Gaza Strip, IDF
"We prepared ourselves and said farewell to our families. If they come in, it will be a battle to the death"
(Israeli Defence Forces) forces targeted a structure in which
Islamic Jihad terrorists involved in attacks against Israelis were present," the spokesman told reporters.
Government spokesman Avi Pazner said the Islamic Jihad activists had been planning attacks on Israeli targets. "We are compelled to try and pre-empt them and neutralise them before they can carry out their murderous activities," he said.
The house was partly destroyed by the force of the explosion. Rubble, the remains of furniture and bloodstained sheets littered the ground.
They said the house belonged to Muhammad al-Kharubi, a high-ranking military official from Islamic Jihad, but there was no immediate confirmation that he had been killed in the strike.
The raid came after Israel
threatened to escalate attacks
The raid came just hours after Israel's inner cabinet approved major attacks on Gaza and the killing of top resistance fighters in response to simultaneous Palestinian human bombings at a strategic port.