One missile struck a car carrying members of al-Quds Brigades, the military wing of Palestinian Islamic Jihad on Tuesday evening. Two were injured, witnesses and medical sources said.

 

A second missile hit a car and wounded three members of al-Aqsa Martyrs Brigades, Fatah's military wing.

 

An Israeli army spokesman confirmed the attack.

 

Israel regulary targets armed Palestinian groups in Gaza. In recent days it has stepped up an offensive in the Gaza Strip in a bid to stop rocket attacks into Israel and to pressure armed groups to free a soldier they captured in June.

 

It was unclear whether the Palestinian militants wounded in the attack were involved in such strikes.

Settlement expansion
 

Meanwhile, in Israel, the Peace Now settlement watchdog group has said settlers have expanded 31 unauthorised West Bank sites, building permanent structures in 12.

The Israeli government promised, as part of the 2003 "road map" peace plan, to dismantle about two dozen of the more than 100 settler outposts, but has been slow to do so.

 

The Peace Now report also says the government continues to expand veteran settlements and in the first eight months of 2006 issued tenders for 952 housing units in West Bank settlements.

 

That compared to 235 issued in the same period last year.

Most of these homes will be built in settlement blocs Israel says it will keep even in the event of a final peace deal with the Palestinians.

 

Palestinians have complained that settlement expansion is a key obstacle to any peace agreement.

 

"The fact that the Israeli government continues to expand settlements and outposts is undermining all efforts to revive the peace process one day," said Saeb Erekat, an aide to Mahmoud Abbas.

 

"We urge the United States to exert maximum efforts to ... stop settlement expansion."