Just hours after a helicopter gunship fired four missiles into Khan Yunis on Thursday, troops pushed into the camp to destroy two 10-storey apartment buildings that overlook a nearby illegal Jewish settlement.
The army justified evacuating 150 Palestinian families to destroy scores of homes because the buildings could threaten the Neve Dekalim colony.
Five Palestinians were injured in the earlier missile attacks, with medics saying that some struck buildings close to Khan Yunis Hospital.
Commanding the operation, Colonel Yehoushua Rinski said the raid was not a collective punishment for a recent Palestinian attack in Beersheba that killed 16 Israelis.
Rinski added destroying the homes would prevent mortar bombs landing in Neve Dekalim. "The situation that the Palestinians use urban places where their civilians live and shoot towards our settlements cannot be tolerated."
The two 10-storey apartment blocs were destroyed despite plans by Prime Minister Ariel Sharon to evacuate all 21 illegal Jewish settlements in Gaza by the end of 2005.