Fatima Husayni, whom medics said was aged 65, suffered fatal head injuries when troops opened fire in the camp, bringing the overall toll since the start of Operation Days of Penitence late last month to at least 128.

Her death came as Israeli officials said they are scaling down their massive invasion in Gaza. However, troops would be redeployed rather than withdrawn completely.

Witnesses said several tanks and armoured carriers began redeploying to positions outside the camp while some Israeli forces remained in some residential parts of the camp.

But Aljazeera's correspondent said a number of Israeli military vehicles were still deployed in the education district in Bait Lahya and the civil service in Jabalya.

Israel launched its northern Gaza offensive, one of its biggest and bloodiest in four years of conflict, on 29 September.

The army has killed more than 130 Palestinians, including resistance fighters and civilians, during the assault. Armed fighters have killed three Israelis and a Thai farm worker.

The latest death brings the total number of people killed since the September 2000 start of the Palestinian intifada to 4492, including 3464 Palestinians and 954 Israelis.