The attack destroyed the workshop but caused no casualties.

Palestinian witnesses said on Thursday that the target was a basement carpentry shop in a Rafah refugee camp on Gaza's flashpoint border with Egypt.

Local medics confirmed no one was hurt.

An Israeli army spokeswoman said the workshop contained mortar bombs stowed away by Islamic group Hamas, which has spearheaded a four-year-old Palestinian uprising in Gaza and the West Bank.

However, it was not possible to confirm the report.

The air strike came hours after a Hamas mortar barrage wounded seven Israeli soldiers in central Gaza.