Witnesses said scores of Palestinian fighters fought a column of Israeli tanks and armoured vehicles as it took positions on the outskirts of the camp under cover of darkness on Thursday.
Helicopter gunships hovering overheard fired two missiles, wounding five Palestinian fighters.
It was the second day in a row that Israeli forces had thrust into the northern Gaza Strip, claiming the area is often used by Palestinians to fire rockets at Israeli targets.
The latest operation comes after an Israeli air strike killed 14 Hamas fighters in the outskirts of Gaza City on Tuesday.
Palestinian Negotiations Minister, Saib Uraiqat condemned the Israeli operation, accusing Israel of doublespeak.
“While Israel speaks about disengagement, its army occupies large parts of the Gaza Strip…turning it into a big prison,” he said.
Israeli forces on Wednesday surrounded Beit Hanoun and Beit Lahiya and bulldozers tore up stretches of road to block off the area.