Witnesses said that about 50 Israeli tanks and armoured vehicles entered the town of Bait Hanun.
Speaking from Gaza, Aljazeera's correspondent in Palestine, Wail Dahduh, said Israeli occupation forces raided the town of Bait Hanun early Saturday morning, a few hours after they were redeployed from Khan Yunis.
Israeli tanks entered the city from three different directions.
He said the operation seemed to be aimed at surrounding the town and deploying soldiers in some areas, in an attempt to halt the continuing mortar and RPG attacks.
However, Israeli forces have repeatedly failed to stop these attacks targeting the settlements, he added.
Over the last three days, Israeli forces have killed 11 Palestinians, including a 10-year-old girl.
Dahduh said Israeli bulldozers, backed by tanks, have also launched a vast demolition operation in the eastern part of Bait Hanun.
As for the southeastern part of the town, he said Israeli forces have set up a new military post.
The latest round of raids has left
scores of Palestinians homeless
Dahduh said the military operation in Bait Hanun has been codenamed Autumn Breeze by the Israeli army.
He said the operation also seemed to be targeting orchards and farms in Bait Hanun, with the bulldozers and tanks razing lands that had been the main source of income for the people of the town.
Israeli forces withdrew on Sunday morning from the Amal neighbourhood and the western camp of Khan Yunus, leaving behind a trail of mass destruction.
Dahduh said the bulldozers of the invading Israeli army unit caused havoc on the infrastructure and basic amenities in the region.
UN relief agencies said Israeli forces and their bulldozers destroyed at least 25 homes and a market place before leaving Khan Yunus.
Izz al-Din al-Qassam Brigades has claimed responsibility for firing three rockets at Sderot at around 6.30am (0430 GMT) on Sunday.
An Israeli army spokeswoman confirmed that Qassam rockets had been fired into the Sderot settlement.
A 10-year-old girl was among the
11 Palestinians killed by Israel
"Since this morning Israeli Defence Forces [Israeli military] are redeploying in the northern Gaza Strip in order to thwart the launching of Qassam rockets at Israeli communities," the spokeswoman said.
"There have been four Qassam rockets launched at Sderot over the weekend. This morning we had one woman who was injured by a Qassam."
Shaul Mofaz, the Israeli defence minister, said: "I have ordered the army to act decisively against mortar and Qassam rocket squads."
Mofaz gave no timeframe for the latest incursion.